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Donald Trump sent the oil market in free fall on Monday with a tweet claiming that oil prices were too high and accusing OPEC. Is Trump unaware that oil prices are a function of supply and demand? Or is it deliberately laying the blame for its destructive embargo on Venezuela?
Oil prices are getting too high. OPEC, relax and calm down. World can not take a price hike – fragile!
– Donald J. Trump (@realDonaldTrump) February 25, 2019
Although it is true that oil prices have reached their highest level in three months, "oil prices are getting too high," is simply the opinion of Donald Trump.
And to call the world "fragile" and suggest higher oil prices would be a kind of disaster is an alarmist story.
Trump is a queen of theater on oil prices
Trump's overly dramatic tweet fits perfectly with the Goldman Sachs report earlier in the day, which predicts Brent crude oil will go even higher at $ 75 a barrel by the end of the year.
But trying to scare the price of oil is a call to the attention of the President-in-Office, which corresponds to his television personality as a global negotiator.
This Goldman Sachs report also indicates that the trading range of $ 70 to $ 75 per barrel would be temporary:
"Although prices can easily trade in the range of 70 to 75 dollars per barrel, we believe that such an environment is likely to fly away," said Jeffrey Currie, global head of research on commodities, and Damien Courvalin, chief strategist in the commodities sector.
And oil prices are determined by supply and demand. So they are not "too high", as Donald Trump says. They are at the level that reflects supply and demand.
Oil prices are higher because of involuntary supply restrictions in Libya and Nigeria
In Libya, the National Oil Corporation refuses to start production of the Sharara deposit, the largest country on the North African continent. | Source: Wikimedia Commons
One of the reasons why oil prices are higher is due to the unintended reduction of supply in Libya and Nigeria, socially and politically unstable.
In Libya, the National Oil Corporation refuses to start production of the Sharara deposit, the largest country on the North African continent.
The facilities were recently seized by a Libyan militia, and the president of the oil company said the militia had "committed violent and terrorist acts against the workers".
In Nigeria, controversial political elections underway have now halted the country's oil production. Western military interventions have destabilized both countries.
Libya and Nigeria are both Obama's and Clinton's fault
The intervention of the Obama administration's regime change in 2011 is partly responsible for the oil crisis. | Source: US Navy
This includes a bill signed by President Obama in 2016 to install US military boots on the ground in Nigeria, which would cause more armed conflict.
It also includes the British government's intervention in 2011 as part of the regime change imposed by the Obama administration, backed by British and French intelligence services, as well as US air power.
The result was a total disaster of violent civil unrest, warring factions and a deluge of new terrorist recruitment, training and planning in the power vacuum left by the relatively stable and secular government of Muammar Gaddafi.
What makes the intervention in Libya even more disconcerting is what a close partner of Gaddafi with the Bush and Obama administrations in the operation War on Terror / Overseas after September 11.
Thus, the previous administration and the two main political parties in Washington deserve their share of responsibility for the 300,000 barrels a day that do not escape Sharara.
Venezuela is the fault of Trump and Bolton
Donald Trump himself is to blame for the high oil prices, given the intervention of his government in Venezuela. | Source: Shutterstock
Oil prices are also higher than they would otherwise have been as a result of Donald Trump's half-baked geopolitical intervention as president of the United States.
In particular, the White House blocked oil shipments to and from Venezuela with a Venezuelan oil embargo last month.
In a research note released on Monday, Goldman Sachs said the oil supply disruption caused by the Trump embargo in Venezuela could reach 300,000 bpd in the coming months:
"While the use of national light crude oil for assembly has helped mitigate the decline in net exports, we estimate that the turmoil in Venezuela is likely to accelerate in the coming months. to potentially reach 200 to 300 Mb / d if no political resolution occurs. "
At the OPEC reference basket price of $ 66 per barrel, it's $ 6.8 billion worth of oil a year that Donald Trump is personally responsible for keeping stuck in Venezuela.
So, if the world is really so fragile that it can not stand a rise in the price of oil, then, instead of asking OPEC to relax and calm down, Donald Trump should calm Venezuela.
Donald Trump Picture of AFP PHOTO / JIM WATSON
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