Crude Extends Losing Streak as Trump Presses OPEC
The price of crude oil continued its downward spiral on Wednesday, extending its losing streak to a fifth consecutive day, as President Donald Trump ramped up pressure on OPEC to increase production and stabilize the global energy market.
West Texas Intermediate (WTI) crude futures fell by 1.4% to $56.44 per barrel, while Brent crude futures declined by 1.2% to $64.44 per barrel. The losses came despite a surprise drop in US crude inventories, which fell by 2.1 million barrels last week, according to data from the Energy Information Administration (EIA).
Trump’s Twitter barrage against OPEC, the Organization of the Petroleum Exporting Countries, appeared to have had an impact on the market. The President tweeted on Tuesday, "Oil prices are getting too high. OPEC, let’s go!," and followed up with another tweet on Wednesday, "Just spoke to the Saudi King and the President of the UAE. They are willing to help with oil. All are happy and getting along great!"
OPEC, which accounts for about 40% of global oil production, has been under pressure from Trump to increase output and reduce prices. The cartel, along with its allies, including Russia, has been implementing production cuts since 2017 to support prices and stabilize the market.
However, OPEC’s efforts have been hampered by concerns over the global economy, which has been experiencing a slowdown. The cartel has also been grappling with internal tensions, particularly between Saudi Arabia and Iran, over the production cuts.
The decline in oil prices has been driven by a combination of factors, including a rise in US shale oil production, which has reduced the country’s reliance on imports, and concerns over the impact of the ongoing trade tensions and economic uncertainty on global demand.
Despite the downward pressure on prices, some analysts believe that OPEC may still be able to stabilize the market by increasing production. "OPEC has the capacity to increase production and balance the market," said Amrita Sen, chief oil analyst at Energy Aspects. "But they need to be careful not to overdo it, as this could lead to a supply glut and put downward pressure on prices."
The ongoing tensions between OPEC and Trump are likely to continue to influence the oil market in the coming days. As the situation unfolds, investors will be closely watching for any signs of a resolution, which could have significant implications for the global economy and energy markets.
