Rising oil prices are now the final destination in President Donald Trump's crosshair. The country's tweeter complained on Friday about OPEC, which offered "artificially high" cost of crude oil, which he said "will not be accepted!"
So, what's behind the price jump? Market results, like success, can claim a thousand fathers, but here's a potential rogue gallery for Trump, after Brent Crude rose to nearly $ 75 a barrel on Thursday, the highest level in more than three years:
- The Saudis trump card has Right this. The world's largest oil exporter has signaled that it wants to push prices even higher, to around [$1945927] $ 80 per barrel to finance the expansionary (and expensive) economic agenda of Crown Prince Mohammed Bin Salman and the assessment of state energy to support giant Aramco before an IPO. The Kingdom led the successful efforts of OPEC, Russia and other key producers to curb global supply and boost prices. At a meeting this week, the oil ministers signaled the willingness to see prices rise further.
- Russia ̵
- The Iran Deal – Fears that Trump will impose sanctions on Iran if the nuclear deal is revised, largely due to the president's public statements, add to market uncertainty. The Obama administration's agreement with Iran has increased the nation's output by more than 1 million barrels a day. A Bloomberg survey of oil market analysts revealed a 50-50 chance of a "snap-back" of sanctions, which could stop up to 800,000 barrels per day of exports by the third-largest OPEC producer within six months. The prices then rise.
- Venezuela's meltdown – This OPEC member has seen its production decline in political and economic difficulties. Trump has intensified this pressure to punish President Nicolas Maduro with harsh sanctions. Among the sanctioners is the former chief financial officer of the state oil producer Petroleos de Venezuela SA . A cryptocurrency introduced by Maduro, based on the nation's vast oil reserves, could also result in sanctions, warn the US.
- Trade Wars – Trump's tough trade talks and "tit-for-tat" tariffs between the US and China have transformed global markets and lifted the specter of further restrictions at a time when US oil and gas exports are rising. In March, the industry said a new White House levy on steel imports could increase the cost of well steel by 25 percent and also discourage pipeline construction.
- And about these pipelines: The Permian Basin, the heart of the slate boom, is coming up with work, equipment and, perhaps most critically, pipeline capacity. Production above the pipeline could increase to almost 1 million barrels a day next year, and no significant new tubes will go into service by the second half of 2019.
- Pipes are not the only things that carry oil. The Jones Act – Section 27 of a law enacted in 1920 requires that goods shipped by ship between US ports be carried on ships built and labeled in the US and owned and owned by US citizens. For example, this is driving up the cost of shipping US crude from the Gulf Coast to East Coast refineries, which often use international oil. The republican senator of Arizona, John McCain, among other things, has demanded to annul the action.
- After all, consumers around the world can blame themselves. Global oil demand is expected to have risen by 2.6 million barrels per day in the first quarter of this year. This is the biggest increase since 2010, the Goldman Sachs Group said on Thursday. Rising consumer spending and cold weather in Europe and the US helped stimulate demand and kept Brent on track for $ 80 in the coming months, according to the Goldman analysts.
- However, there is a lever that Trump could use to push oil prices: release of crude oil from the US Strategic Petroleum Reserve. The emergency supply currently holds about 665 million barrels, according to the Department of Energy. The support has been used in the past to deal with market disruptions such as the civil war in Libya and Hurricane Katrina.
– With the support of Tina Davis and Laura Blewitt