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TEXT OF STORY
BRIAN WATT: OPEC oil ministers will sit down later today in Doha, Qatar to discuss possible cuts in production. With the cost of crude falling in recent weeks, cartel members want to push oil prices back up. To do that, OPEC is expected to reduce output by as much as one million barrels per day. What kind of impact would that have on the US economy? Marketplace’s Jeff Tyler takes a look.
JEFF TYLER: Even before OPEC discussions today, Wall Street-types had already adjusted calculations to reflect an anticipated bump in oil prices.
JARED BERNSTEIN:“The futures markets have priced this in already. Whether it shows up at the pumps – that can be a matter of a month or two, depending on how quick OPEC gets its act together to actually constrain supply.”
That’s Jared Bernstein, senior economist at the Economic Policy Institute.
Eventually, he says, cuts in oil production could have some economic ripple effect.
BERNSTEIN:“It could definitely hurt. But I don’t think what’s being discussed is going to show up as a significant factor either in the macro-economy or even at the level of consumer economics.”
When gasoline prices spiked in recent months, Bernstein says, consumers bought less, effectively reducing demand.
As a result, he says, oil companies are wary of raising prices too much for fear of driving customers away.
I’m Jeff Tyler for Marketplace.
WATT: Oil’s now trading by the way at just under $58 a barrel.
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