Publications: Notes at the Margin

The Trump Effect on Oil (May 22, 2017)


Oil producers will meet this week. All indications suggest they will extend their agreement to cut production through at least the end of the year. The meeting and decision are irrelevant. Events occurring in Washington, DC, will overwhelm oil markets within a few months. The rapid descent of the United States to the status of, at best, a banana republic will remove a prime driver of growth in global oil use. Those who continue to focus on the tree leaves rather than the forest—or the mountain range—will likely experience large losses. Sadly, the United States economy confronts an abyss absent dramatic change in Washington. Specifically, the succession of President Pence seems required to avoid catastrophe.


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