President Trump Tweets at OPEC
March 29th, 2019
The energy market has a very strong selloff in early trading yesterday. The reason is possibly two fold but the main driver that is getting attention is a tweet. President Trump again tweeted at OPEC that prices were getting too high. The President’s Tweet: “Very Important that OPEC increase the flow of oil. World markets are fragile, price of oil getting too high. Thanks you!” This what the news is reporting as the main driver to push prices down but also the release of the US GDP final estimate of the 4Q 2018 and it was revised down to 2.2% from 2.6%. It really doesn’t matter as it didn’t take long for the market to start to recover and get all the way back to nearly even as the day wore on.
Despite the recent negative economic news and outlooks the performance of the economy in 2018 has been a good year. Report indicated that this is the best year since 2015. In the energy market ther are getting ready to post their bet quarterly gains on over a decade.
Helping the market to rebound after the early sell off was news out of Reuters that the US has instructed oil trading houses and refiners around the world to further cut dealing with Venezuela or face sanctions themselves.
Citi increased their Brent crude oil forecast from $64 per barrel up to $70 per barrel for 2019 sighting tighter world supplies as the main reason.
Russia said it has sent “specialist” to Venezuela under a military cooperation deal but said they pose no threat to reginal stability, dismissing a call from US President Donald Trump to remove all military personnel from the country. President Trump said on Wednesday that all options were open to make Russia pull troops out of Venezuela after two Russian air force planes landed outside Caracas on Saturday carrying nearly 100 Russian troops. Venezuela’s military attaché in Moscow said Russia had sent “servicemen” to Venezuela but that they would not take part in military operations. Separately, Kremlin spokesman, Dmitry Peskov, said Russian military specialists are in Venezuela to serve pre-existing contracts for the supply of Russian arms.
Sources stated that Saudi Arabia is having a difficult time convincing Russia to remain in the OPEC-led output cuts agreement, with Russia considering a possible three month extension.