Publications: Notes at the Margin

Could Donald Trump "Trump" al-Falih? (April 23, 2018)


Oil ministers from OPEC, along with representatives from other countries that have collaborated in production cuts to raise crude oil prices, met Friday in Jeddah, Saudi Arabia, to review progress. The members of OPEC's "ministerial monitoring committee" agreed it was too early to change the output agreement. This decision flies in the face of statements from external organizations such as the International Energy Agency that world crude inventories have been reduced to the committee’s target levels. The ministers have obviously "moved the goalposts." They likely think oil is now headed to $100 per barrel, something that should make Saudi crown prince Mohammad Bin Salman Al Saud (MBS) very happy. Now, though, that rise is not so assured. Saudi minister al-Falih and his backers failed to account for politics in the United States. With one tweet, President Trump has likely dramatically altered the future trend of oil prices. While analysts and reporters who focus on oil may see the president’s tweet as irrelevant, those who make their living buying and selling oil should not.


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