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OPEC Meetings May Provide Economic Answers—or Just More Questions

Simon Henderson

Also available in العربية

The Hill

December 4, 2019

Amid Saudi stock sell-offs, Russian production limits, U.S. tariff showdowns, and a flurry of other factors, the potential impact of the cartel’s Vienna meetings is difficult to predict.

Making a bet on the outcome of this week’s meetings is only for fools or those with the calmest temperament and the deepest pockets. Where is the U.S. economy heading, especially in the absence of a tariff agreement with China? An additional twist is that if the price of oil increases, exploiting American shale oil reserves becomes viable. The key figure is oil around $60 per barrel. Below that, shale production is likely to fall. Anything above, and the extra oil flows. These sort of arguments have swirled in advance of previous OPEC meetings, but this time there is a special extra factor. Thursday marks the completion of the partial sell-off of the Saudi state oil company, Saudi Aramco. Riyadh will want to depict the IPO, as the process is known, as a resounding success. The reality is almost the opposite...

Read the full article on the Hill website.