- Oil dropped for the new week on Trump’s declaration of agreement from Saudi Arabia that production needs to increase, but recovered quickly.
- Traders are awaiting clarification on whether or not Saudi Arabia could decide to abandon OPEC limits, though the move is looking unlikely.
Crude oil has opened the new week off of Friday’s highs following confusing statements from US President Trump regarding Saudi Arabia’s willingness to shun OPEC limits and increase production.
WTI surged to a new multi-year high last week as the US searches for allies to take part in a shunning of Iranian oil as Trump looks to impose stiff economic sanctions on Iran. The US pulled out of the Iranian nuclear accord recently, and Trump is asking other countries to stop buying oil sourced from Iran, threatening action against countries that interfere with the US’ trade policies and ignore Trump’s calls for an Iranian oil ban.
The lack of clarity on Iran’s future capacity to bring crude to market has sent oil prices back on the rise, a move that Trump is also unhappy with, and over the weekend the US president made contact with King Salman of Saudi Arabia. Trump’s declaration that Saudi Arabia agreed to increase production were premature, and the White House was forced to walk back the POTUS’ statement, clarifying that the Saudi government has made no official decision to allay the US’ concerns on oil prices.
WTI crude levels to watch
Trump’s confusion on who’s producing what saw crude oil prices decline from Friday’s close above 73.50 into 71.80 in the early market, but traders recovered quickly, though not enough to close the week opening gap, and oil prices are remaining constrained near 72.60 as traders await further information. Last week’s run up the charts sees the last swing high for WTI far below at 69.00, while current prices are currently being hampered by May’s peaks near 72.80.
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