A swipe against oil cartel OPEC by US President Donald Trump brought the ongoing oil market rally to a screeching halt. In early Asian trading on Friday (20 August), the most keenly watched oil futures benchmarks – Brent and WTI – were lurking at highs not seen since November 2014.
However, Trump’s criticism of OPEC’s stance on production cuts hammered the oil market. “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!," the President tweeted.
The OPEC cuts, instituted in concert with Russia and nine other non-OPEC oil producers, to the tune of 1.8 million barrels per day, began early on 2017 and are due to expire at the end of 2018. However, many OPEC members have been hinting at extending the curbs to 2019, despite Brent futures hitting three-year highs.
Barely 30 minutes after the President’s tweet, Brent futures dropped 0.60%, while WTI futures dropped 0.57%. Additionally, ETFS Brent crude fell 1.6%, while ETFS WTI crude oil was down 1.93% and ETFS daily leveraged WTI crude oil fell 3.84%.
At the time of publication, 14:19pm BST, the Brent front month futures contract was down 0.62% or 46 cents to $73.22 per barrel, while the WTI was down 0.38% or 26 cents to $68.03 per barrel.
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Gaurav S.
