Americas News
Crude Soft as Trump Bemoans High Prices and Analysts Forecast Oil Breaking $80 Soon
Given U.S. president Donald Trump's repeated blasting this summer of the Organization of the Petroleum Exporting Countries (OPEC) causing high oil prices, it was inevitable that he would resume focus following this week's disclosure that member Saudi Arabia could live with prices over $80 per barrel.
And just as inevitably, oil prices pulled back slightly as the brash billionaire tweeted his displeasure on Thursday: Brent settled down 78 cents at $78.70 per barrel, while West Texas Intermediate settled down 32 cents at $70.80 per barrel - after rising nearly 2 percent in the previous session.
Trump's tweet that caused the downturn read: "We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!
"We will remember; the OPEC monopoly must get prices down now!"
Trump urged OPEC to increase production at its meeting in Algeria, which will take place on Sunday and will consist of discussing how to allocate supply increases to offset the loss of crude exports from Iran under the Trump-imposed sanctions against the Islamic republic; Reuters noted that while the meeting "is unlikely to agree to an official rise in crude output....pressure is mounting to prevent a spike in prices."
Still, many analysts insist that Trump's demands and OPEC's efforts notwithstanding, crude breaching the $80 threshold is certain: Bjarne Schieldrop, chief commodities analyst at SEB Markets, said, "Brent is definitely fighting the $80 line, wanting to break above, but this is likely going to break very soon."
Of course, the contrary opinion is equally compelling, and on Thursday it was expressed by Thomas Farley, former president at NYSE Group, who told CNBC that market threats such as trade, higher rates, and quicker Fed hikes aren't that much of a threat.
He said, "They're not huge threats....markets all around the world are going down, and U.S. markets are going up."
He added, "the bigger risk is the global economy doesn't look healthy outside of the U.S....I think we could have a long sideways period in the market now, as the rest of the world drags us down"; in short, slower economic grow means less demand for oil and therefore lower prices.
Even though it was widely reported earlier this week that the Saudis have been said by anonymous sources to be fine with prices over $80, subsequent analytical thought posits that they in fact can do very little about oil prices rising and are attempting to put on a brave face.
