Oil falls as Trump calls for OPEC price cuts Reuters
by Florence Tan
SINGAPORE (Reuters) – Oil prices rose on Monday after U.S. President Trump asked OPEC to cut prices following sweeping measures to boost U.S. oil and gas production in his first week in office.
Futures were down 53 cents, or 0.68%, at $77.97 a barrel by 0430 GMT, after settling up 21 cents on Friday.
U.S. West Texas Intermediate crude was at $74.16 a barrel, down 50 cents, or 0.67 percent.
Trump on Friday called on the Organization of the Petroleum Exporting Countries to lower oil prices to hurt oil-rich Russia’s finances and end the war in Ukraine.
“One way to stop it quickly is for OPEC to stop making so much money and drop oil prices … that war will stop immediately,” he said.
In addition, Trump has threatened to hit Russia and other participating countries with taxes, tariffs and sanctions if they do not reach an agreement to end the war in Ukraine.
Russian President Vladimir Putin said on Friday that he and Trump should talk about the war in Ukraine and energy prices.
“They’re giving room for negotiation,” said John Driscoll, a consultant at JTD Energy in Singapore, who said it would create volatility in the oil market.
Trump’s policies to boost U.S. production while trying to secure foreign markets have likely left oil markets a bit behind, he said.
“He wants to carve out some of the OPEC market share, so in that sense he’s competitive,” Driscoll said.
However, OPEC and its allies, including Russia, have yet to respond to Trump’s call, with OPEC+ delegates suggesting plans to increase oil production from April.
Both gauges posted their first decline in five weeks last week as concerns about sanctions against Russia dampening supply.
Analysts at Goldman Sachs said they did not expect a big change in Russian output as higher freight rates and a higher supply of non-sanctioned vessels prompted them to move Russian oil. Buying the oil.
“As the ultimate goal of the embargo is to reduce Russia’s oil revenues, we expect Western policymakers to prioritize raising discounts on Russian barrels,” the analysts said in a note.
Still, JP Morgan analysts say some risk premium is justified given that 20% of the global Aframax fleet is currently facing sanctions.
“The use of sanctions on the Russian energy sector in future negotiations can go either way, which shows that the zero risk premium is inappropriate,” he said.
Meanwhile, the United States quickly reversed its plan to impose sanctions and tariffs on Colombia, the White House said on Sunday, after the South American country agreed to accept refugees deported from the United States.
Colombia sent 41% of its seaborne crude to the United States last year, so the sanctions could have disrupted oil supplies, according to data from analyst firm Kepler.