Oil Market Fundamentals Now Impossible to Analyze Thanks to Trump: Sen

The market continues to behave in a most predictable fashion. File Image / Pixabay

As oil production in Saudi Arabia expectedly reached record levels last month and U.S. drilling expansion halted due to oil prices dipping below $55, one prominent member of the analytical community took to the airwaves to blame U.S. president Donald Trump for rendering her forecasting abilities impossible.

Amrita Sen, chief oil analyst at Energy Aspects, told Bloomberg that "it's impossible now to do fundamental analysis with any form of certainly because of what's going on with the U.S. administration and their relationship with Saudi Arabia."

Sen went on to complain that Trump "told everybody that his sanctions against Iran would reduce that countries exports to zero, and "everybody planned for that" by boosting crude production.

A visibly frustrated Sen added that Trump then famously granted eight trading countries - including China and India - temporary exemptions against the sanctions, and she said that while the Organization of the Petroleum Exporting Countries (OPEC) is now tasked with taking the extra supply off the market, "it almost becomes impossible."

The normally erudite Sen, perhaps overly concerned with the efficacy of the analytical community, seems to have missed the obvious: that Trump in seeking relief for his constituents at the gas pump deliberately played the Saudis and other countries in order to boost production and thus cause a substantial lowering of prices.

Sen also seemed to overlook the fact that while crude analysts frequently state their case with certainty, their predictions are frequently proven wrong, often dramatically and within hours after their proclamation - and without any influence by Trump.

Undaunted, Sen said that thanks to Trump, her company is unable to predict what the outcome of the expected OPEC cuts will be or even if they will be enacted.

Meanwhile, the crude industry continues to perform with few surprises, and apparently unfazed that analysts can't accurately predict what they'll do next: according to industry executive, Saudi Arabian oil production surged to a record near 11 million barrels per day in November after the kingdom received stronger-than-usual demand from clients preparing for a disruption in Iranian supplies.

Also, Baker Hughes data released Wednesday shows that rigs drilling for crude in the U.S. fell by 3 to 885, due to oil dipping below $55 per barrel.

Other news on Wednesday leading up to the OPEC summit had the Kremlin stating that Russian president Vladimir Putin may meet with Saudi crown prince Mohammad bin Salman at the Group of 20 summit next week, possibly to discuss the crude market.

Sen omitted in her rant that one of the key factors that make reliable forecasts impossible when it comes to OPEC matters is that the cartel's initiatives are always accompanied by in fighting and cheating, and although the organization has repeatedly declared it is favouring a return to production cuts, Russia along with members such as Libya, Iraq, and Nigeria have vigorously stated they will be boosting production in the near future.