Saudi Arabia’s signal to ease limits on Crude Oil production led to prices falling Friday after a 3-week rally, and OPEC cited an angry Tweet by President Donald Trump as the trigger.
Saudi Arabia’s Minister of Energy Khalid al-Falih Tweeted: “I reiterated #Saudi’s commitment, in collaboration with other producers, to guarantee availability of sufficient oil supply to compensate for potential loss & to meet rising demand.”
After WTI Crude rising above 70 bbl, a 4-year high, prices dropped 4% Friday to 67.88 bbl on the New York Merc after Saudi Arabia and Russia’s near agreement through OPEC to open up supply in 2-H of this year. Adding 1-M of more BPD to the supply.
President Trump’s Tweet brought about the policy change, OPEC Secretary General Mohammad Barkindo told a Russian economic forum in St. Petersburg.
“We pride ourselves as friends of the United States,” SG Barkindo reportedly told a panel with Saudi and Russian energy ministers.
The next OPEC meeting is 22 June.
“Secretary General Barkindo’s Tweet gives President Trump bragging rights for pushing OPEC to open the taps,” Robert McNally, a former National Security Council adviser to President George W. Bush (43) told reporters.
Since November 2016, Russia and OPEC have kept Crude Oil production below capacity, which has more than 2X’s prices to effectively “rebalance the market” that has been done and now the price of WTI Crude and ICE Brent Crude will decline significantly, seeing WTI Crude price at pre-9 April prices: 59-63 bbl sooner rather than later.
The World is awash in Crude Oil.
Have a terrific Memorial Day weekend.
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