Washington (awp/afp) – Oil prices fell sharply on Thursday after Donald Trump called on Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to lower prices.
“I will ask Saudi Arabia and OPEC to lower the cost of oil,” said the American president during an online speech to an audience of big bosses at the World Economic Forum in Davos , in Switzerland.
“I am frankly surprised that they did not do it before the election. Not doing it was not really a proof of love,” Mr. Trump then said.
Black gold prices instantly reacted downward.
Up slightly before the American president’s declaration, the price of a barrel of Brent from the North Sea, for delivery in March, lost 0.90% to $78.29.
Its American equivalent, a barrel of West Texas Intermediate, for delivery the same month, fell 1.09% to $74.62.
“The return of Donald Trump to power puts operators on alert (and) brings a lot of volatility,” Phil Flynn, of Price Futures Group, commented to AFP.
To boost prices, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) has been organizing a supply shortage strategy since the end of 2022.
-The cartel currently has untapped production capacity of nearly six million barrels per day that the American president would like to see returned to the market in order to drastically lower energy prices.
Donald Trump hopes to fight inflation and increase the purchasing power of Americans.
However, notes Phil Flynn, the American president has repeatedly threatened to apply new sanctions to several countries including Iran and Russia, which could reduce the supply of crude and therefore reduce the possibility of falling prices.
“So even if OPEC increases production, (the United States) will probably need that oil because (they will) probably reduce exports from Venezuela, Iran and potentially Russia, depending on of the evolution of the peace negotiations”, said Mr. Flynn.
On Thursday, the U.S. Energy Information Administration (EIA) released its figures on commercial crude oil inventories, which contracted more than expected last week, marking the ninth consecutive decline in reserves American.
During the week ending January 17, these reserves decreased by 1 million barrels. American crude production was stable compared to the previous period, at 13.48 million barrels.
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