3 Reasons Why Republicans Got An Election Break With Lower Oil Prices

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For the last few months, President Trump and the Republicans have been worried that they would be exceedingly high going into the midterm elections.

In June, the American oil benchmark, WTI, hit a three and a half year high, reaching over $ 74 per barrel. President, Trump and the Republicans Responsible for the United States . The worst part for Republicans was that they had inexplicably set the Iran sanctions to restart on November 4, just two days before the midterm elections. Some analysts predicted that the Iran sanctions could be the price of the international oil benchmark to soar to $ 100 per barrel.

Just spoke to King Salman of Saudi Arabia and explained to him, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference … to high! He has agreed!

– Donald J. Trump (@realDonaldTrump) June 30, 2018

President Trump was clearly concerned, and he began a public campaign OPEC and its most powerful member, Saudi Arabia. His goal is to compel them to produce more oil to counteract the expected Iran decreases. He spoke to the king on the phone, he was talking about it, and he was making a series of tweets about it. He wanted Saudi Arabia to produce more oil, and he is believed to be a member of the U.S. to act.

Now it seems that the president and the Republicans have dodged the political oil bullet. The average price of gasoline is still only about $ 2.84. This is a $ 3.00 per gallon problem, which it does not seem likely to cause a problem before election day. There are three reasons to stay and save the Republicans from a serious political headache.

1. By far, the most important factor is that oil traders have Realized that Iran is actually producing and exporting more oil than expected. In the spring, they have been spiking, some forecasts expected. The trump administration says it's going to halt all oil exports from Iran. Despite this policy, it is politically useful to the Trump administration that traders view Iran 2.2 million barrels per day. This has helped to reduce the price of oil. In fact, the price of oil has fallen to 12.5% ​​since its October high three weeks ago.
2. Oil speculators could have spooked by the political plot in Saudi Arabia concerning the Jamal Khashoggi affair. However, the rift between Saudi Arabia and the US has not impacted prices. In fact, Saudi Arabia has pledged to further increase its production. Perhaps this was an attempt to garner favor with the U.S., but regardless, it has caused a drop in oil prices across the board.
3. The stock market is falling. On Wednesday, the DJIA fell over 600 points. While oil and equities do not move in tandem, there appears to be an overall wariness of the part of investors. Perhaps the midterm elections themselves are making uneasy speculators. May be significant negative economic signs are impacting investors. Regardless, when stocks drop precipitously, oil often does too much. (For a very clear example, see WTI's $ 110 drop in only seven months at the start of the 2008 financial crisis).

Perhaps Trump's persistent pressure on production has gone off – or where they just got lucky that U.S. voters will not be looking at $ 3.00 or $ 4.00 per gallon gasoline prices as they head to the polls on November 6.

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For the last few months, President Trump and the Republicans have been worried that they would be exceedingly high going into the midterm elections.

In June, the American oil benchmark, WTI, hit a three and a half year high, reaching over $ 74 per barrel. President, Trump and the Republicans Responsible for the United States . The worst part for Republicans was that they had inexplicably set the Iran sanctions to restart on November 4, just two days before the midterm elections. Some analysts predicted that the Iran sanctions could be the price of the international oil benchmark to soar to $ 100 per barrel.

Just spoke to King Salman of Saudi Arabia and explained to him, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference … to high! He has agreed!

– Donald J. Trump (@realDonaldTrump) June 30, 2018

President Trump was clearly concerned, and he began a public campaign OPEC and its most powerful member, Saudi Arabia. His goal is to compel them to produce more oil to counteract the expected Iran decreases. He spoke to the king on the phone, he was talking about it, and he was making a series of tweets about it. He wanted Saudi Arabia to produce more oil, and he is believed to be a member of the U.S. to act.

Now it seems that the president and the Republicans have dodged the political oil bullet. The average price of gasoline is still only about $ 2.84. This is a $ 3.00 per gallon problem, which it does not seem likely to cause a problem before election day. There are three reasons to stay and save the Republicans from a serious political headache.

1. By far, the most important factor is that oil traders have Realized that Iran is actually producing and exporting more oil than expected. In the spring, they have been spiking, some forecasts expected. The trump administration says it's going to halt all oil exports from Iran. Despite this policy, it is politically useful to the Trump administration that traders view Iran 2.2 million barrels per day. This has helped to reduce the price of oil. In fact, the price of oil has fallen to 12.5% ​​since its October high three weeks ago.
2. Oil speculators could have spooked by the political plot in Saudi Arabia concerning the Jamal Khashoggi affair. However, the rift between Saudi Arabia and the US has not impacted prices. In fact, Saudi Arabia has pledged to further increase its production. Perhaps this was an attempt to garner favor with the U.S., but regardless, it has caused a drop in oil prices across the board.
3. The stock market is falling. On Wednesday, the DJIA fell over 600 points. While oil and equities do not move in tandem, there appears to be an overall wariness of the part of investors. Perhaps the midterm elections themselves are making uneasy speculators. May be significant negative economic signs are impacting investors. Regardless, when stocks drop precipitously, oil often does too much. (For a very clear example, see WTI's $ 110 drop in only seven months at the start of the 2008 financial crisis).

Perhaps Trump's persistent pressure on production has gone off – or where they just got lucky that U.S. voters will not be looking at $ 3.00 or $ 4.00 per gallon gasoline prices as they head to the polls on November 6.