OPEC Aims to Cut Oil Output
The Organization of Petroleum Exporting Countries (OPEC) is looking to impose substantial cuts to oil production as a means of preventing crude prices from dropping even further. The thinking is that if there is less supply, it will drive up demand — and the price.
As it is, oil sales are down drastically as the travel industry suffers through the COVID-19 episode.
Oil ministers from the 14 OPEC countries decided to cut production by 1.5 million barrels a day to see what type of impact it would have on pricing. If that’s not enough, they might look to impose further cuts. The OPEC proposal would have member countries cutting output by 1 million barrels a day, with another 500,000 barrels to be cut by non-member allies, like Russia.
Since the outbreak began in China last month, air travel to the country has all but stopped as the world’s most populated nation looks to contain the virus. That in turn has caused ripple effects throughout the world.