Trump does not want oil to hit $70
One ‘tweet’ (Twitter post) from President Trump last Monday caused the oil prices to drop by 2.5 percent within minutes. The short warning to oil producers resulted in loss of revenues reaching more than $300 million.
It seems President Trump’s “tweet” has a direct influence on oil trade and oil prices, more than the demandand- supply rates. Oil markets responded promptly, despite the Venezuelan oil crisis and commitment of OPEC to reduce oil production by 1.4 million barrels per day.
President Trump just does not want the oil prices to reach or within the range of $70 per barrel. This is because of his concern for the upcoming presidential elections. He does not want the local prices to go high, irrespective of what happens to the oil markets that are tight in supply because of Venezuela and the sanctions on Iran.
The American president does not want oil prices to reach $70, and will even use his strategic reserve to bring down the oil prices. USA oil production is stabilizing now at 12 million barrels, setting the record to become the biggest oil producer, and to remain in that place for some time.
Its oil growth at such a level within a short time has surprised everyone, as it was expected to reach the record level by the end of this year but not so early this year. Its impact has already started showing, with Saudi Aramco reducing its export of oil to USA by more than three million barrels, and moving from the US market to the Asian markets in particular.
Oil producing countries are proceeding with their supply cuts, in an effort to balance the overall supply and stability in the market as well as stabilize the oil prices. OPEC and other oil producers will also review the level of reduction, and if necessary, maintain the same volume in case further sanctions are imposed on Iran. President Trump’s “tweet” certainly cannot be ignored; everyone who pays attention will listen and act. This powerful voice is playing a vital role these days in leading the oil prices.
By Kamel Al-Harami Independent Oil Analyst