OPEC reaches compromise with UAE

If the compromise takes hold that could lead to a drop in the price of oil. In this post pandemic economy who knows what effect this will have. I expect we won’t notice much of a change in the short term. It’s more important to keep an eye out for the long term trend. Right now, long term, it looks like oil consumption will continue to increase as under-developed countries continue to rely on cheap oil to grow their economies.

OPEC members reached a compromise with the United Arab Emirates, agreeing to lift the amount of oil that country can eventually pump as part of a wider agreement with Russia-led producers to boost global supplies, according to people familiar with the matter.

The compromise, reached between Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, and the U.A.E. is provisional and subject to approval at an as-yet unscheduled meeting of the cartel and a wider group, called OPEC+, that includes Russia-led producers.

That means any new output from a broader production-increase deal reached earlier this month—but held up by the U.A.E.’s resistance—won’t hit markets immediately. Other OPEC members could use concessions made to the U.A.E. to argue for increases in their own output inside the group, delegates said.

Wall Street Journal
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