By stock_street_wire

Oil Set to Plunge as OPEC Seeks to Boost Output Again

So much for the oil rally.

Even with the coronavirus stirring demand fears, supply could soon jump if OPEC decides to taper its historic production cuts.  In fact, by Wednesday, the group is expected to unwind its output cuts, with some of the Russia’s top companies preparing to increase supply by August.

But that could prove to be a disastrous move with the virus still not under control.

After all, should the virus force global economies to close up shop again, it could easily threaten consumption, while substantially increasing supply.  Remember, the last time we ran into this issue, oil plunged well into negative territory.

“The increase in supply would come as the still-raging pandemic clouds the demand outlook. The U.S. is struggling to control the outbreak, with many states reversing re-opening plans. Australia’s second-largest city, meanwhile, went back into lockdown last week as the virus made a comeback there,” for example, says Bloomberg.


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