Saudi Arabia will reduce how much oil it sends to the global economy, taking a unilateral step to prop up the sagging price of crude after two previous cuts to supply by major producing countries in the Opec+ alliance failed to push prices higher.
The Saudi cut of 1 million barrels per day, to start in July, comes as the other Opec+ producers agreed in a meeting in Vienna to extend earlier production cuts through next year.
The problem with Orr’s capitulation to the market with his puny 25 point rise and his refusal to allow monetarism to allow the Government to shirk their fiscal responsibilities any longer by claiming inflation has peaked is that it’s a big gamble.
The big reason inflation dropped in the last quarter was because of softening petrol prices driven by Biden tapping the strategic reserves plus the true cost of China rapidly reopening after Covid has seen sluggish economic sentiment and a looming debt implosion.
OPEC responded to that with a series of cuts they have now extended which will coincide with the 25cent subsidy coming off next month.
On top of that we have an unprecedented 100 000 migrants arriving plus the damage to our horticultural sector that will send food prices into the stratosphere.
Orr’s bluff to make the Government tax more or spend less by claiming inflation has peaked when it is about to explode again will not win Orr any friends.
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