Trump's Greenland Deal Causes 2% Drop In Oil Prices

Meanwhile, Saudi Aramco chief dismisses global glut fears: File Image/Pixabay

Perceptions of a kinder, gentler U.S. president Donald Trump due to his statement that he would not take Greenland by force (and subsequently securing permanent access to it in a deal with NATO) caused a 2 percent drop in oil prices on Thursday.

While those familiar with Trump's business tactics believed access to rather than ownership of Greenland was his objective all along, analysts such as Ole Hansen, chief commodity analyst at Saxo Bank, remarked, "There is a deflation of risk premium related to the Greenland debacle and Iran supply risk has also been reduced."

Earlier, upon learning that Tehran had supposedly ceased murdering protestors of that country's leadership, Trump said he hoped there would be no further U.S. military action in the Islamic republic.

Brent on Thursday settled down $1.18, or 1.8 percent, at $64.06 per barrel, while West Texas Intermediate settled down $1.26, or 2.1 percent, at a one-week low of $59.36 per barrel.

The Trump effect was also felt in Venezuela, whose legislature advanced a bill to loosen state control over that country's oil sector; the legislation would create new investment opportunities for private companies and establish international arbitration for investment disputes.

A draft of the legislation obtained by media stated that private companies could independently operate oil fields, market their own crude output, and collect the cash revenues through contracts with state-run Petróleos de Venezuela.

The bill was supported by acting Venezuelan president Delcy Rodriguez and is expected to advance quickly to the approval stage.

In other oil news on Thursday, Amin Nasser, chief executive officer at Saudi Aramco, told media on the sidelines of the World Economic Forum in Davos, Switzerland, that "Oil glut predictions are seriously exaggerated."

Nasser went on to argue that global oil stocks are low, while the amassed barrels in floating storage on tankers are mostly sanctioned supplies; plus, spare capacity has dwindled over the past year, and "If OPEC+ further unwinds cuts, spare capacity will fall even further [than the current 2.5 percent], and we will need to watch this very carefully."