Oil Dips as Trump’s Iran Plans, Vow to Lift Output Swing Market

by Bloomberg | Julia Fanzeres, Jacob Wendler
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas

Oil edged down as US President Donald Trump’s renewed pledge to drive down the price of crude overshadowed his push for tighter Iranian sanctions.

West Texas Intermediate dipped 0.6% to settle below $71 a barrel, extending a three-day slump that brought futures near oversold territory on the relative strength index. Prices swung wildly during the session, first giving up gains after Trump reiterated a campaign promise to boost oil production, then rebounding as much as 1.2% after the US Treasury sanctioned an international network for facilitating the shipment of Iranian crude oil to China. 

Prices then faded again on the prospect that tighter Iranian sanctions may have a more immediate and material effect on supplies as relaxed US enforcement allowed Iran to boost oil exports by about 1 million barrels a day in recent years. By contrast, skepticism abounds that Trump’s proposed overhaul of energy policy will spur US fossil fuel producers to boost output and abandon their focus on capital discipline and shareholder returns.

“We remain strongly of the view that President Trump could ultimately prove to be a bearish influence on the oil market,” Citigroup analysts including Francesco Martoccia wrote in a note. “Specifically, Trump has consistently highlighted lower energy prices as the central solution to US inflation, interest rate, debt, and cost-of-living issues, and that this is a core issue for which he was elected.”

Since Trump returned to office last month, crude futures have been subjected to several sharp intraday swings, buffeted by his tariff threats and other trade moves. Thursday’s fluctuations mirrored a volatile day in the equity and municipal bonds markets, with participants parsing mixed signals ahead of Friday’s jobs report. 

Trump frequently moved crude prices by several dollars in his first term with social media posts and other pronouncements, a pattern that has begun to re-emerge over the last two weeks. Traders have also exited crude and fuel markets in droves due to price swings, further causing prices to slide. 

There are signs that the physical market is softening. The premium that Brent for immediate delivery is commanding over contracts for the following month shrank near the lowest this year, below 50 cents a barrel, compared with around $1 at the end of last month.

by Bloomberg | Julia Fanzeres, Jacob Wendler
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas