Sunday, 1 July 2018

Why Trump, Saudi bonhomie may not help oil prices stay down in long term

Crude, crude oil, oil

US President Donald Trump’s weekend of oil diplomacy offered mixed messages on supply, and conflicting responses from traders after prices fell even as analysts predicted any drop may be short-lived. Crude fell in New York late Sunday after a Trump tweet over the weekend suggested that Saudi Arabia had agreed to pump 2 million more barrels a day. But follow-up statements from the White House and the Saudi Press Agency were more ambiguous. They both said the two sides had talked, but neither statement cited a specific target. In the short term, even the chance of a Saudi boost would likely lower prices, said Phil Flynn, a senior market analyst at Price Futures Group Inc. But the underlying dynamic of a market in which demand increasingly threatens to overtake supplies could push prices back up over the long run, he said.

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