The Secretary-General, Organisation of Petroleum Exporting Countries (OPEC) Mohammed Barkindo, yesterday said President Donald Trump’s tweets, highly critical when crude oil prices rise, have complicated oil markets.
Trump has occasionally blasted OPEC when members discuss curbing production to prop up crude oil prices. But he has also praised de facto OPEC leader Saudi Arabia for taking steps to ease crude oil prices.
The social media comments are among the various factors OPEC has been trying to juggle as it looks to stabilise markets in the face of the U.S. shale boom.
“The tweets are one of the new additions to these uncertainties. The president doesn’t give notice before he tweets. (This) Makes our job more difficult in focusing on the fundamentals,”” Barkindo said at a news conference yesterday at CERAWeek by IHS Markit.
Still, even though Trump’s tweets can make crude oil prices wobble, he added that he welcomes the president’s engagement.
“It’s understandable that any president in the U.S. would take more than a passing interest in what happens to the energy and oil markets. Since we are in a digital age of course tweets have become one medium of communication. We welcome this rising interest in Washington on what’s happening. We welcome a president during this dialogue,” Barkindo said.
OPEC will meet in April to decide if it should extend or scale back its deal with top nonproducers to curb production by 1.2 billion barrels per day to prop up crude oil prices.
West Texas Intermediate, the U.S. benchmark for crude oil prices, was up 0.2 per cent at $56.93 a barrel. Brent crude oil prices rose 0.2 per cent to $66.73.
Shares of oil giants Exxon Mobil (XOM) and Chevron (CVX) were up 0.4 per cent and 0.5 per cent, respectively, on the stock market today.
But Trump’s tweeting isn’t alone in causing instability in crude oil prices.
Barkindo said the Trump administration’s waivers to U.S. sanctions on Iranian oil have added to uncertainty.
China and India, the top two importers of Iranian oil, are among eight countries that received temporary waivers on Iran sanctions. The waivers will expire in May and it’s unclear which, if any country, will get an extension.
Meanwhile, pending legislation in the U.S. Congress is another X factor. The House Judiciary Committee passed the No Oil Producing and Exporting Cartels (NOPEC) Act last month, paving the way for a vote in the full House.
The NOPEC bill would change U.S. antitrust regulations to allow the U.S. attorney general to sue OPEC members for collusion.
But Barkindo warned that the NOPEC legislation as it stands “would not serve the interest of the United States.”
“It would also usurp the interests of the oil and gas industry that has seen such a remarkable rebound,” he said.