Oil prices drop after Trump’s repeated demand for OPEC to lower costs
Since the inauguration of the American president Donlad trump, he went to urge The Organization of the Petroleum Exporting Countries (OPEC) to lower oil prices. The US President also threatened to impose taxes and tariffs against the countries who won’t respond to his call
Today, it seems that OPEC responded to the president and the oil prices went down .
Oil prices have declined after US President Donald Trump’s statement followed the announcement of large-scale measures to increase US oil and gas production during his first week in office, Reuters said.
the prices went down to the Brent crude oil fell by 0.7% to $78.0 per barrel. The price of US West Texas Intermediate (WTI) crude oil dropped by 0.7% to $74.15 per barrel.
John Driscoll of Singapore-based consultancy JTD Energy said that oil markets are likely leaning slightly toward a downturn due to Trump’s policies aimed at increasing US production, as he seeks to secure foreign markets for American crude oil.
“He’s going to want to muscle into some of the OPEC market share so in that sense he’s kind of a competitor,” Driscoll said.
World’s market expectations
Goldman Sachs analysts stated they do not expect a significant blow to Russian production, as higher freight rates have incentivized the availability of non-sanctioned vessels for transporting Russian oil, while an increased discount on the ESPO blend attracts price-sensitive buyers to continue purchasing it.
“As the ultimate goal of sanctions is to reduce Russian oil revenues, we assume that Western policymakers will prioritize maximizing discounts on Russian barrels over reducing Russian volumes,” analysts noted in their report.
However, JP Morgan analysts believe that some risk premiums are justified, given that nearly 20% of the world’s Aframax-class fleet is currently under sanctions.
“Using sanctions on Russia’s energy sector as leverage in future negotiations could have unpredictable outcomes, suggesting that a zero risk premium is not appropriate,” they added.
In addition, the US quickly backed away from plans to impose sanctions and tariffs on Colombia after the South American country agreed to accept deported migrants from the US, according to a White House statement released late Sunday.
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