Oil prices turned sharply lower on Monday morning, reversing early gains, after U.S. President Donald Trump took to Twitter again to criticize OPEC and the high oil prices.
Both benchmarks were trading slightly up in Asian trade early on Monday, but then President Trump tweeted: “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!”
The tweet sent prices tumbling and at 08:40 a.m. EST on Monday, WTI Crude was down 2.41 percent at $55.88 and Brent Crude was trading down 2.16 percent at $65.80.
OPEC and its Russia-led non-OPEC allies are cutting a combined 1.2 million bpd production hoping to rebalance the market and lift oil prices.
Saudi Arabia, OPEC’s de facto leader and largest producer, has already signaled that it would cut production to around 9.8 million bpd in March, some 500,000 bpd below the commitment in the OPEC+ deal. Saudi Arabia’s Energy Minister Khalid al-Falih said earlier this month that Saudi Arabia would be also cutting its crude oil exports to near 6.9 million bpd next month, slashed from 8.2 million bpd just three months ago.
Al-Falih has also expressed hopes that the market would rebalance by April.
Boosted by OPEC and Saudi Arabia’s resolve to do ‘whatever it takes’ to bring the market to balance, oil prices rose last week to a fresh 2019 high and the highest since November 2018.
President Trump hadn’t tweeted about OPEC or oil prices since late November when he thanked Saudi Arabia for keeping the price of oil low. Back then, the U.S. President also expressed hope that the Saudis and OPEC would not be cutting production again.
OPEC and allies, however, agreed to a new production cut deal for six months through June, with an option to review in April.
After several heavy sell-offs in the fourth quarter last year, oil prices have regained some 20 percent so far in 2019, boosted by the cuts, but also by the U.S. sanctions on Iran and Venezuela, and more recently, by hopes that the U.S. and China might reach a trade deal.
By Tsvetana Paraskova for Oilprice.com