President Trump's call for OPEC to lower oil prices triggered a market reaction, pushing crude oil prices down for the first time this year. Despite uncertainty about OPEC's response, traders are anticipating increased U.S. oil production under Trump's energy policies.
Crude oil prices were trending lower today, poised to record their first weekly loss of the year. This decline is attributed to market expectations that President Donald Trump will increase global oil supply, leading to a decrease in prices. The latest downturn followed Trump 's speech at the World Economic Forum in Davos, where he urged OPEC and specifically Saudi Arabia to lower oil prices. 'If the price came down, the Russia-Ukraine war would end immediately.
Right now, the price is high enough that that war will continue - you got to bring down the oil price,' Trump stated during his address. 'They should have done it long ago. They're very responsible, actually, to a certain extent, for what's taking place,' he added. OANDA senior market analyst Kelvin Wong commented on Trump's speech, saying, as quoted by Reuters, 'More potential downward choppy movement in the oil market in the near term due to the Trump administration's lack of clarity on trade tariffs policy and impending higher oil supplies from the U.S.' While it remains uncertain if OPEC will comply with Trump's request and increase oil production immediately, traders responded swiftly, reversing a bullish trend that had emerged in the oil market towards the end of last year. On Thursday, both Brent crude and West Texas Intermediate fell by over 1%, with Brent crude trading at $78.23 per barrel and WTI at $74.55 per barrel at the time of writing. Beyond the immediate reaction to Trump's appeal to OPEC, traders seem confident that his energy policies will result in significantly higher U.S. oil production. Although some analysts have expressed skepticism about this possibility, along with the industry itself, oil drillers have repeatedly indicated they have no immediate plans to substantially increase output. Instead, they prioritize fiscal discipline and shareholder returns. Nevertheless, the market has reacted strongly to Trump's inauguration, seemingly treating his plans as already implemented.
OIL PRICES OPEC TRUMP ENERGY POLICY USA OIL PRODUCTION
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