NEW YORK – President Donald Trump told Saudi Arabia, Russia and their oil cartel partners to “take it easy” on efforts to tighten supplies and raise the price of crude.
“Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!” Trump tweeted Monday morning in a clear signal to the Saudi-led Organization of the Petroleum Exporting Countries (OPEC).
Trump’s tweet that sent oil prices tumbling Monday morning, according to CNBC. The price fall eliminated gains made earlier that day amid rising market optimism. Trump gave OPEC a similar warning against efforts to raise oil prices in September when crude prices were higher than today.
Analysts attributed the price rise to improving trade talks between the U.S. and China, unrest in Nigeria and Venezuela, Libya’s refusal to restart production in the El Sharara oil field and continued efforts to curtail supplies by OPEC and Russia.
OPEC-led supply cuts are eating away at the expected crude oversupply many experts expected for 2019. OPEC and Russia agreed to take 1.2 million barrels of oil per day off the market during the first six months of 2019.
So far, however, not all OPEC members complied with planned production cuts. Bloomberg estimated OPEC’s compliance at 86 percent in January. Iran, Libya, Nigeria and Venezuela are exempt from planned cuts.
Energy analysts seem bullish on oil in the near-term, but confidence in higher prices weakens as the U.S. ramps up oil exports.
U.S. crude oil exports hit record levels by mid-February, according to government data. The country exported 3.6 million barrels per day as domestic production hit a record-breaking 12 million barrels per day.
To counter this influence, Saudi Arabia is pushing Russia to formalize its partnership with OPEC. Saudi Arabia and Russia are the world’s biggest oil producers after the U.S., which now produces more oil and natural gas than any other country.