Crude Falls as Trump Calls for Cheaper Oil
by Bloomberg | Julia Fanzeres and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil fell after President Donald Trump said he’ll push Saudi Arabia and OPEC to reduce the price of crude, reviving a tactic to control energy prices that he frequently employed during his first term in office.
West Texas Intermediate futures slid 1.1% to settle below $75 a barrel, while global benchmark Brent slipped near $78.
The Organization of the Petroleum Exporting Countries and its allies have been engaged in a yearslong effort to support prices by curbing output. The producer group has millions of barrels a day in spare capacity that it could potentially return to the market — and it has pledged to gradually revive a chunk of this output starting in April after several delays.
“I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil,” Trump said in remarks delivered virtually to world leaders gathered in Davos Thursday. “You’ve got to bring it down.”
Representatives of OPEC didn’t immediately respond to requests for comment on Trump’s remarks. The White House said in an emailed statement that Trump spoke with Saudi Arabia’s Crown Prince Mohammed Bin Salman and discussed efforts to stabilize the Middle East, as well as opportunities to increase the “mutual prosperity” of the US and the kingdom. The readout didn’t specifically mention oil prices.
Trump’s interventions in the oil market aren’t a new tactic. In his first term, he repeatedly called on OPEC+ to lower prices when he felt they were too high and also struck a deal with Saudi Arabia and Russia to cut output when prices collapsed at the onset of the pandemic in 2020.
“Oil markets are now facing the introduction of a new variable this year, that is the ‘Trump call option’ on energy prices,” said Frank Monkam, head of macro trading at Buffalo Bayou Commodities.
The remarks stifled a rebound earlier in the session that had been driven by signs that fresh US sanctions on Russian crude, introduced before Trump took office, were tightening the global market. The drop puts crude on pace for its fifth straight losing session, a skid partly driven by Trump’s threats to impose tariffs on China, potentially weakening demand in the world’s top oil importer.
Oil is still higher this year on the Russia sanctions as well as cold temperatures in the Northern Hemisphere that are boosting heating demand and threatening to curtail supplies.
In another sign of a potentially tightening market, US crude inventories fell 1.02 million barrels last week, a ninth straight weekly decline that brings them to the lowest since March 2022, according to government data released Thursday. Gasoline inventories rose 2.33 million barrels.
Oil Prices:
- WTI for March fell 1.1% to settle at $74.62 a barrel at in New York.
- Brent for March settlement slid 0.9% to settle at $78.29 a barrel.
by Bloomberg | Julia Fanzeres and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas