It didn’t take long for U.S. President Donald Trump to comment on oil prices, just ten days after he expressed hope that OPEC wouldn’t cut oil production.
On Wednesday morning, President Trump thanked Saudi Arabia for keeping oil prices low and called for even lower prices, likening the lower price of oil to a tax cut.
“Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82. Thank you to Saudi Arabia, but let’s go lower!” President Trump tweeted.
At the start of last week, in his previous tweet aimed at OPEC, President Trump said oil prices should be lower—“Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!”
The previous tweet came hours after Saudi Arabia’s Energy Minister Khalid al-Falih said at the end of an OPEC panel meeting that the group needed “to do whatever it takes to balance the market,” and that OPEC analysis shows that a cut of 1 million bpd may be needed to restore market balance amid fears that oversupply has started to build again.
OPEC will discuss a possible U-turn in the oil production policy at its meeting in early December, and according to Ahmed al-Kaabi, Governor for OPEC of the United Arab Emirates (UAE), the cartel will very likely agree to cut oil production, although the size of the cuts has yet to be decided. Related: Goldman Expects Extreme Volatility In Oil Markets This Month
Despite various reports out of OPEC that a cut is in the works, oil prices tanked early on Tuesday on fears of oversupply, slower demand, and a sell-off on the equity markets.
The American Petroleum Institute (API) reported a surprise crude oil inventory draw later on Tuesday, halting the oil price drop.
Both WTI Crude and Brent Crude prices were up around 2 percent at 09:00 a.m. EST on Wednesday morning, after President Trump’s thank-you-Saudis tweet, which came a day after he refused to blame Saudi Arabia for the killing of Jamal Khashoggi, saying that “The United States intends to remain a steadfast partner of Saudi Arabia to ensure the interests of our country, Israel and all other partners in the region.”
By Tsvetana Paraskova for Oilprice.com
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Oil exporting countries are not going to sell oil for less, for free. It will cost something -- the question is what, exactly?
Oil exporting countries today are extraordinarily dependent on oil sales to balance their national budgets. Countries from afar lose sight of how undiversified the economy in these countries has been, and largely continues to be today. They have extraordinary expenses to pay.
The Saudi Crown Prince has the objective of changing his country's dependence on oil sales. He want Saudis to go to work to do real, productive, competitive, and diversified work. For this, I applaud him.
Unfortunately, there seems to be more to the Prince than I first thought. And now authoritarian leaders are banding together in general, and specifically over the world's most sought after resource.
All to burn the oil resource. Makes sense today. Will it make sense tomorrow in terms of national alignments and wars? We shouldn't be selling our souls for pieces of silver in order to do this.
we noticed many news items and oil price predictions of 100 dollars per barrel it did not happen the problem is that predictions coming from renowned news agencies and financial sources , wrong predictions lead to loss of investors traders and consumers of oil . There are forces who try to derail the impact of demand and supply impact then such forces achieve short time success but their success fails and prices of oil be close to balancing big powers cant impose the price they like if they feel that they can succeed that means they will be quick rich
Price of oil and other goods should be connected to value of the product and supply demand force finally we will see if the 62 dollars per barrel price is just and capable of staying for few months
Adnan Mustafa DSC Finance editor and media expert since 48 years
Trump should be careful though. There likely is no reason oil should be over $40 now, but $50 to $50 for WTI, probably $55 is a sweet spot. Its like a tax cut, and yet at the same time is high enough to keep U.S. exploration and production climbing.
Hopefully Saudi Arabia will stop being greedy and look at what is in its best interest, and $80 oil is NOT.