What’s driving the oil price spike?
OPEC is ready to cut production, but not for long.
OPEC’s oil production fell by a fifth in January, a week after the Organization of the Petroleum Exporting Countries cut production by 5 percent, or about 3.7 million barrels a day.
OPEC will meet in Vienna this weekend to discuss further cuts.
But the cartel’s leaders said Thursday that they would hold off on cutting until a final agreement is reached on production limits.
If no agreement is struck, OPEC will be forced to increase production by 1.5 million barrels per day, a decision that would trigger supply disruptions that could disrupt the world economy.
The cartel’s decision is likely to be a setback to President Donald Trump’s efforts to increase U.S. production.
Trump is also likely to push for a larger increase in U.N. oil production, and a decision by the group to cut output could force the United States to import more oil from other countries.
In other words, Trump has to keep the pressure on the group for more production.