Oil in Global Economy Series: Trump confirms $80 as his ceiling price for oil

President Trump has been demanding that the United States’ closest ally in the Middle East, Saudi Arabia pumps more crude oil to ease pressure on rising price.

Price rise background:

Despite OPEC announcing that it would increase production at its June meeting, the financial speculators have been pushing prices of crude benchmarks higher around the world as the exact amount committed, remains vague.

Based on OPEC’s statement, we at FxWirePro calculated the amount to be somewhere between 500,000 barrels per day (bpd) to 600,000 bpd. However, that didn’t seem satisfactory as the focus turned to political unrest amid declining production in Libya, Venezuela, and Nigeria. In addition to that, the looming U.S. sanctions on Iran’s oil exports in November, which according to Trump will be harshest ever has kept the markets on edge.

President Trump’s intervention:

As the price of Brent crude reached $80 per barrel in June and was about to break higher President Trump intervened through twitter calling Saudi Arabia to increase production. President Trump himself tweeted on June 30th, “Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & dysfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference...Prices too high! He has agreed!”

It seems that $80 is the ceiling price for President Trump. Brent is currently trading at 

As the price is once again approaching the $80 level, Mr. President intervened again via Twitter, “We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!”