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Economist Says OPEC Not Cutting Production For 'Non-Economic, Possibly Political' Reasons

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Speaking to Benzinga, Economist and Peak Prosperity Co-Founder Chris Martenson said that “below board” discussion on why Saudi Arabia and other members of OPEC don’t want to cut oil production lead to “non-economic” reasons.

“Just look at the numbers,” Martenson said.

Martenson explained that OPEC exports 30 million barrels a day, and the world is over supplied by roughly a million barrels a day.

“So you cut a million and a half barrels. Quick math: 30 million barrels at $50 gets you a billion dollars less than 28.5 million barrels at $90, which is probably where the price would go back to if you just cut 1.5 million barrels,” he said.

United States Oil Fund LP (ETF) (NYSE: USO) recently traded at $21.54, up 1.1 percent. The United States Natural Gas Fund, LP (NYSE: UNG) was up 1.5 percent at $18.82.

Posted-In: Chris Martenson Crude Oil economist Oil OPECEconomics Exclusives Markets

 

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