According to Finanz, President Trump is close to making oil prices drop down to $50/b like never before. Last week was bearish for the global market of crude oil. This happened mainly due to the agreement between the U.S. president and the King of Saudi Arabia.
According to international experts, the market of crude oil is currently on the verge of big price moves. In particular, they think there are several factors that can make the oil prices drop all the way down to $50/b. Even though the oil prices are currently recovering a bit and may well continue recovering in the near future, they will eventually go down at some point until November. This prediction has to do with the expectations related to the Cushing oil hub. The thing is that a breakdown in the hub resulted in a massive shrink in the U.S. crude oil inventories (around 70%) all the way down to the lowest capacity since 2014. The capacity is expected to be completely restored closer to November.
At the same time, President Trump urged the OPEC to contribute to pushing the oil prices down. The talk between the U.S. President and the King od Saudi Arabia seems to have changed the market bias. Saudi Arabia has been increasing its daily oil production up to the record-high level over the last 4 years along with dropping the export prices for the last 2 months.
They say, Saudi Arabia's export capacities make it possible to ship 15 million barrels of crude oil a day. Given the speed at which technology has been developing so far, it would be easy to increase the daily production by 2 million barrels a day, which may drop the prices all the way down to $45/b.
At the same time, experts say that Trump is ready to use the USA's strategic oil inventories to achive his goal by exporting even more oil. His administration is already working on it. It's important for him to make the gas in American gas stations cheaper by November when the U.S. Congress preliminary elections are to take place. This is expected to help the Republicans to preserve the majority in the Congress.
