Will OPEC Cuts "Make Fed's Job More Difficult"?
Several OPEC+ members are set to tighten global production by an additional 1.16 million barrels per day until the end of the year, further burdening central bank efforts to curtail global inflation — but critically protecting the alliance's broader output strategy from political pressures.
While much will be said about the monetary consequences of OPEC's action, Bullard is aware of the potential for the trap:
Oil prices fluctuate around. It's hard to track exactly. Some of that might feed into inflation and make our job a little bit more difficult," he said.
The anticipated increase in oil prices for the rest of the year as a result of these voluntary cuts could fuel global inflation, prompting a more hawkish stance on interest rate hikes from central banks across the world. That would, however, lower economic growth and reduce oil demand expansion," said Victor Ponsford of Rystad Energy in a research note.
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Source: ZeroHedge, CNBC
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razo2 : oil market is pricing in a recession since the last OPEC+ meeting last year. the Saudi energy minister is not an idiot. he always see facts and bonds. what will happen if US/China/EU goes into recession or depression as OPEC+ continues to flood oil into the market? oil will fall back to 2014/2015 prices or even negative. read what happened in 2014/2015 oil collapse, oil was even cheaper than water because of 8 traders in UK.
104039223 : okey