[ad_1]
Susan Walsh / AP
President Trump spent some of his vacillations from July 4th to OPEC on Twitter, demanding lower prices for gasoline.
Tweets are more and more common these days, an indication of the political peril Trump feels due to rising gas prices. The logic is strange, however. Trump wants lower oil prices while his administration is trying at the same time to eliminate 2.5 million barrels a day of Iranian oil exports.
"It does not appear to the US president that it is Trump himself that is driving up prices through his Iranian policies," writes Commerzbank in a note. If the United States succeeds in preventing Iran from exporting its oil, OPEC will have a hard time making up for the missing barrels. "Maybe one of the US President's advisers should explain this to him," Commerzbank added.
Trump's advisers are clearly lacking in their duties, but Iranian officials have tried to lend a helping hand in explaining the situation. "You impose sanctions on the main producers, founders of OPEC, and yet you ask them to cut prices? Since when did you start ordering OPEC!" Iran's governor of OPEC, Hossein Kazempour Ardebili, said in a statement. "Your tweets have pushed prices up by at least $ 10 / b." Pls stop it, otherwise it will go even higher!
Meanwhile, the US Congress has revived legislation that would remove the immunity that sovereign nations have to be prosecuted for antitrust violations. The so-called "NO PEC Act" would subject OPEC to antitrust law, allowing the United States to turn to OPEC to manipulate the oil market. Legislation has floated around Washington for years, usually going nowhere because former presidents have consistently opposed the measure.
The legislation will probably go nowhere, but OPEC could be forgiven for being troubled by the mixed signals coming from Washington, which can basically boil down to: "Stop your anticompetitive behavior" but "intervene in the markets to manipulate prices to our advantage", and "no one is allowed to buy oil from Iran" and "why are oil prices so high?" 19659007 ] Leaving aside Washington's inherently contradictory goals, it is not clear that OPEC can stop rising oil prices even if it wants to. The group is beginning to lose control of the oil market now that supply breakdowns accumulate.
President Trump wants Saudi Arabia to add 2 million barrels a day (mb / d) of fresh water supply, but the Kingdom would have trouble increasing The fastest record production in Saudi Arabia is about 10.7 Mb / d. Using all of its unused capacity would mean a production of about 12.5 Mb / d, but most analysts believe that it would take more than a year to achieve, and some analysts wonder if it's even possible at all.
Producing at this level would require more drilling and expansion of existing fields – this is not as simple as opening faucets.
In addition, in recent years, OPEC's spare capacity has declined both in absolute terms and in the oil market, reducing its influence. Excluding the new members, Gabon and Equatorial Guinea, OPEC's effective production capacity has decreased by 800,000 b / d in the last five years, while global demand has increased by 10 Mb / yr. j, according to Energy Intelligence.
This leaves very little firepower to appeal. The potential failure in Iran alone could overwhelm the unused capacity of the group. The United States hopes to take 2.5 million b / d of Iranian exports offline, which is roughly equivalent to the theoretical reserve capacity left by Saudi Arabia. "Unused capacity in OPEC countries is just enough to offset that amount, but will not be enough if supply is reduced by failures elsewhere – as in Libya and Canada at the time – and a drop in Venezuelan oil production – a result, "concluded Commerzbank.
Source link
