Oil Gains, OPEC Disregards Trump’s Tweets
On Thursday, United States
president Donald Trump called out OPEC on Twitter. The tweet, basically,
comments on how the organization should increase production rates, and in turn,
supplies, to lower current oil prices.
Trump said on his Twitter post, "Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!"
The president did something similar on February 25 of this year telling OPEC to limit supply cuts as to not go overboard with the pricing in the market.
“Prices getting too high," he said. "OPEC, please relax and take it easy. World cannot take a price hike - fragile!”
Trump's tweets contributed to 2018’s turmoil in oil prices, which dropped by 25%. His most recent February tweet pulled down oil prices to about 3%. However, market data showed on Thursday that the president may be losing his touch with OPEC.
“Production cuts from the OPEC+ group of producers have been the main reason for the dramatic recovery since the 38 percent price slump seen during the final quarter of last year,” the head of commodity strategy at Saxo Bank stated.
“In fact, the recovery has been so strong and swift that WTI is currently heading towards its biggest quarterly gain, currently 32 percent, since Q2 2009, when the recovery from the global financial crisis saw it jump by more than 40 percent,” he added.
As of writing, WTI crude is at $60.13 per barrel gaining 1.40%, Brent is 1.06% higher at $67.81 per barrel, and the OPEC basket is at $67.15 with a 0.18% increase from the previous data.
"The president should remember that overall strong oil prices are a net positive for the economy, according to his own advisors," said a Price Futures Group energy analyst who is also a Trump supporter who is unfavorable of the president’s anti-OPEC campaign.
Tweets aside, Trump also has other weapons in his arsenal. Once the sanction for Iran expires in May of this year, he could allow Iranian oil imports to be bought, as well as authorize the sale of oil from the U.S. SPR, or the Strategic Petroleum Reserve.
On the flipside, the oil market is threatened by a potential U.S. recession, as well as the economic slump taking hold in China and Europe.
The Bank of America stated that they are growing more concerned about the outlook for 2020.
“Manufacturing tends to lead consumer confidence … A deeper dive into protectionism could eventually kill burgeoning global consumer sentiment and trigger a global recession.”
Trump said on his Twitter post, "Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!"
The president did something similar on February 25 of this year telling OPEC to limit supply cuts as to not go overboard with the pricing in the market.
“Prices getting too high," he said. "OPEC, please relax and take it easy. World cannot take a price hike - fragile!”
Trump's tweets contributed to 2018’s turmoil in oil prices, which dropped by 25%. His most recent February tweet pulled down oil prices to about 3%. However, market data showed on Thursday that the president may be losing his touch with OPEC.
“Production cuts from the OPEC+ group of producers have been the main reason for the dramatic recovery since the 38 percent price slump seen during the final quarter of last year,” the head of commodity strategy at Saxo Bank stated.
“In fact, the recovery has been so strong and swift that WTI is currently heading towards its biggest quarterly gain, currently 32 percent, since Q2 2009, when the recovery from the global financial crisis saw it jump by more than 40 percent,” he added.
As of writing, WTI crude is at $60.13 per barrel gaining 1.40%, Brent is 1.06% higher at $67.81 per barrel, and the OPEC basket is at $67.15 with a 0.18% increase from the previous data.
"The president should remember that overall strong oil prices are a net positive for the economy, according to his own advisors," said a Price Futures Group energy analyst who is also a Trump supporter who is unfavorable of the president’s anti-OPEC campaign.
Tweets aside, Trump also has other weapons in his arsenal. Once the sanction for Iran expires in May of this year, he could allow Iranian oil imports to be bought, as well as authorize the sale of oil from the U.S. SPR, or the Strategic Petroleum Reserve.
On the flipside, the oil market is threatened by a potential U.S. recession, as well as the economic slump taking hold in China and Europe.
The Bank of America stated that they are growing more concerned about the outlook for 2020.
“Manufacturing tends to lead consumer confidence … A deeper dive into protectionism could eventually kill burgeoning global consumer sentiment and trigger a global recession.”
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Oil Gains, OPEC Disregards Trump’s Tweets
Reviewed by fsmsmart
on
March 29, 2019
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Reviewed by fsmsmart
on
March 29, 2019
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