U.S. President Donald Trump's claim that OPEC is pushing oil prices off an oversupply and surplus of floating deposits has one problem: it's only half the story.
While OPEC has limited supply to revive oil prices, the group's success means that there is no global oil spill.
"Looks like OPEC is back," Trump said in a Twitter post. "With record volumes of oil everywhere, including fully loaded ships at sea, oil prices are artificially very high! Not good and will not be accepted!"
Since January 201
The amount of crude oil in floating deposits has dropped to 40.7 million barrels since April 13, from 97.2 million barrels at the end of 2016 – a decrease of 58 percent – according to data from Vortexa Ltd. In addition, the curve for Brent Crude has moved to a market condition called backwardation – when short-term contracts are more expensive than those at a later date – suggesting that there is no oversupply.
Oil reserves in developed countries are only 30 million barrels above their five-year average, the yardstick used by OPEC to gauge whether markets are balanced. The International Energy Agency, based in Paris, said in its latest market report this month. That's more than 300 million barrels as the group began their cuts.
In recent weeks, oil analysts have pointed out that the reduced flood has reduced a buffer for the market, which means geopolitical events – like the renewal of US sanctions against Iran – would have a more dramatic effect on oil prices , Trump has until 12 May to decide if these measures should be reintroduced.
– With support from John Deane, Laura Hurst and Alex Longley