Why are oil prices flowing?

NEW YORK (CNNMoney) –

Although they were burned, oil prices plummeted suddenly.

Rumors of an emergency action by the US government have helped drive down oil prices. 5% in US crude Monday, falling to 67.58 dollars a barrel (dpb)

The turnaround eliminated 9% of the oil price in less than a week. US oil closed at 74.11 dpb on July 10th.

"This is a great reminder of how quickly market sentiment can change and the volatility of these markets," said Michael Wittner, global head of oil research badysts attributed the mbadive selloff Monday at reports suggesting that Saudi Arabia and the United States are competing to avoid an oil shortage caused by President Donald Trump's sanctions on Iran.

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On Friday night, the Wall Street Journal reports that the Trump government is considering a Strange measure: to badociate with other Western countries to release simultaneously, oil is reserved for emergency situations.

Such a step is not imminent and would only happen if efforts to get that OPEC The Ministry of Energy, which released oil from the strategic oil reserve l & rsquo; Last year after Hurricane Harvey declined to comment on the newspaper . about the report. The White House also declined to comment

Trump has repeatedly criticized OPEC for high oil prices and complained that prices are "too high". This is despite the fact that Trump's firm stance on Iran, the world's fifth-largest oil producer, has contributed to higher prices.

"Trump is trying to bring down the price of crude oil.This is related to mid-term elections," said Ben Cook, portfolio manager at BP Capital Fund Advisors

Michael Tran, director of strategy RBC Capital Markets global energy company, doubts that it is necessary (or even useful) for the use of emergency oil reserves, and noted that refineries in the United States are already operating at competitive levels. "Extremely high levels", which leaves little room to convert more oil into gasoline.

AMLO's refining plan will face some challenges, led by Saudi Arabia, and Russia last month agreed to pump more oil, but their measure failed to cool prices.In fact, the bulls have argued that the release of more oil will now leave Saudi Arabia with few tools to answer a Future Shortage.

Another factor behind the fall of Monday is a report from Bloomberg News that Saudi Arabia is offering additional crude oil in addition to its contract supplies to some buyers in Asia . This suggests that Saudi Arabia is taking strong measures to prevent oil prices from rising too much.

"They let buyers know: if they want more crude from us, we have it," Wittner said. There are indications that at least one of the limited members of OPEC is recovering. Last week, oil prices fell after the Libyan national oil company announced that it had regained control of several ports, allowing it to resume its exports. Interruptions in Libya and Venezuela were crucial to push prices up to their highest levels in almost four years.

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"We have tracks that barrels are available and are not in the shortage we thought," said BP Capital's Cook .