Recently, particularly on Tuesday, the global oil price fell 2.2%. Reportedly, this turmoil was the result of Trump’s skeptic speech on US-China trade war progression at the United Nations General Assembly.
As a result, Brent crude futures fell 2% to $63.42 a barrel. Meanwhile, US West Texas Intermediate futures were down 1.9% at $57.52 a barrel.
Actually, the two benchmarks reportedly have fallen to a lower, if not the lowest, level even before the attack on Saudi’s oil facility. However, Trump’s recent skepticism added up to the discouragement of global oil price, including the foregoing.
Accordingly, the skepticism has made oil trade uncertain and, subsequently, the trade traffics are low. As a consequence, the oil supply outnumbers the demand.
“Given continued US production growth and new production in Norway and Brazil, the market feels oversupplied, even though Saudi oil production has been impacted over the past 10 days,” said Andy Lipow,president of Lipow Oil Associates in Houston.
Also Read: Oil Prices Surge Pushes Asia Markets Lower
Factors Causing Oil Price Discouragement
US President Donald Trump’s pessimistic speech regarding the settlement of the on-going dispute made markets, particularly oil markets, uncertain. In his speech at the United Nations General Assembly, Trump criticized China’s unfair trade practices. Also, he stated that the US do not want ‘bad deals.’
“Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping technology transfers and the theft of intellectual property and also trade secrets on a grand scale,” Trump said.
Actually, Trump’s speech was not the sole factor to weaken the price. The oil price has comparatively escalated since the beginning of the year, but the attack on Saudi oil facility nearly halved the production of the world’s biggest oil producer.
Correspondingly, Saudi Arabia has been working hard to normalize its oil facility. Meanwhile, President Trump, and several world leaders, appeared to blame Iran for the attack.
Also Read: Saudi Attack Won’t Affect Oil Supply – Indonesian Oil Ministry
