Bill Seidman, CNBC’s chief commentator, told “Morning Call” that OPEC’s decision to hold production at current levels is good news for the U.S. economy.
“OPEC is really Saudi Arabia,” he said Thursday. “As long as Saudi Arabia wants to keep the oil price about where it is now, I think that’s what we’re going to see for the coming months. Therefore, I don’t think it will have a big effect on the economy because there won’t be much change.”
The Organization of Petroleum Exporting Countries, the source of about a third of the world’s oil, had cut output by 1.7 million barrels a day. OPEC doesn’t plan to meet again until September.
Oil recently fetched $58.37 on the New York Mercantile Exchange. The price peaked last July at $78.40 a barrel.
Seidman said OPEC’s decision to hold production steady is also good news for inflation watchers.
“I don’t think there’s any inflation ahead of any material amount,” he said. “I’ve been saying that for the last three years. We are getting a little increase in labor costs and that could push things up a little. But no major inflation ahead.”