On Thursday, President Trump called upon the OPEC cartel to increase oil output, warning the organization that oil prices are getting to be too high. And he did this just ahead of the organizations June meeting, where they would typically meet to decide whether or not to extend (or increase or decrease, etc) output cuts.
Using his favorite communication method, the US president tweeted, “Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!”
With that, it should be noted that oil prices had slipped early on Thursday on the heels of a surprise boost in US crude inventories. Reuters reports that experts said the recent fall, however, does not “derail the short-term bullish argument that both the OPEC+ production cuts and supply outages will outweigh the global growth concerns and rising US production.”
We should also consider that this tweet also comes only a few months after OPEC (and its allies, hence: OPEC+) agreed to output. This was in December, and the agreement intended to boost oil prices to compensate for a somewhat dramatic drop at the end of last year.
Accordingly, crude oil prices slipped, slightly, this week, with the Energy Information Administration reporting a moderate build in US crude supply for the third week of March. This increased supply by 2.8 million barrels (for the period), following almost immediately another report, from the American Petroleum Institute, that reported the surplus.
But just a week prior, the EIA report a 9.6 million barrel draw helped to bolster West Texas Intermediate supply, bringing the price in the $60-per-barrel (USD) mark.
All that in mind, analysts argue that last year’s pressure from the Trump Administration—largely emphasized by more Trump-tweeting OPEC attacks—is what contributed to the cartel’s decision to lift the production sanctions, back in June. But Trump has not had much effect on OPEC, of late. In fact, OPEC+ has held strong a decision to cut production, despite Trump’s tirade to go the opposite way. And, since January, the group has maintained the goal of shedding 1.2 million barrels per day from the market in order to prevent the surplus.
Finally, OPEC was scheduled to meet in April, but has pushed this meeting to June in order to take more time to assess the effect that US sanctions will have on the future market. And Trump may have to wait for this analysis to see any changes in OPEC+ activity.