OPEC has to decide whether it will continue to curb oil output
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OPEC is set to meet Nov. 30 in Vienna. And it’s an important meeting because the cartel has to decide what it plans to do with oil output for the next three to six months.
In April, OPEC and its allies decided to significantly curb production, and the plan right now is to add some of that back to the global market on Jan. 1.
But ramping up production when demand is still weak could have major consequences on a relatively stable oil market.
“And so a lot of people are looking to OPEC to say, hey, let’s not wreck this oil rally right now by dumping another 2 million barrels on it,” said Ellen R. Wald, an energy industry consultant.
Wald said that while oil prices have risen over the past few months, global demand remains precarious given the COVID-19 spike. And OPEC is well aware.
“They know that if they affect prices too long in one direction then there are responses in the economy, they’ve witnessed this in history,” said Carey King with the University of Texas Energy Institute.
He said OPEC won’t just be discussing the pandemic, but electric vehicles and other technological advances that could curb fossil fuel demand in the coming months and years.
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