Crude Oil Drops After Trump Warns OPEC Again on High Oil Prices
Oil Price Analysis and News
- Trump Warns OPEC Over High Oil Prices
- Crude Oil Futures Fall Over 1%
Crude Oil up over 20% YTD
Crude oil futures dropped over 1% after Trump stated that oil prices were getting too high and calling on for OPEC to relax. So far, crude oil has seen an impressive start to the year with Brent crude seeing YTD gains of 24% and is up 31% since the December lows. Much of the gains have been attributed to the effect of sanctions on both Iran and Venezuela, while the improvement in risk sentiment stemming from a more constructive outlook regarding US-China trade wars have also underpinned prices.
Saudi Action May Raise Prospect of NOPEC Bill Approval
Alongside the aforementioned factors, oil prices have also been given a boost from Saudi Arabia looking to take aggressive action having pledged to curb its crude output (Click here). With this in mind, there is an increased risk that President Trump may begin to signal his support for a NOPEC bill, which if implemented would allow the US to sue OPEC members for manipulating oil prices.
US Supply Increasing
While OPEC+ have been curb production in order to stabilize oil prices, the US continue to pump oil at record levels with last weeks EIA crude report showing production at 12mbpd for the first time. Elsewhere, several key shale regions are expected to increase supply to a record 8.4mbpd, which in turn raises the likelihood for US crude production to continue rising from the current 12mln.
BRENT CRUDE PRICE CHART: Intra-day (Feb 25th, 2019)
Oil Impact on FX
Net Oil Exporters: These counties tend to benefit when the price of oil rises. This includes RUB, CAD, MXN, NOK.
--- Written by Justin McQueen, Market Analyst
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