Brent Crude the benchmark for Nigeria crude oil fall sharply after United States President Donald Trump’s warns Organization of Petroleum Exporting Countries (OPEC) against squeezing supply.
“Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!” the president tweeted.
U.S. West Texas Intermediate crude oil futures fell $1.36, or 2.4 percent, to $55.90 around 8:25 a.m. International benchmark Brent crude futures were down $1.53, or 2.3 percent, at $65.59 a barrel.
It was his first tweet directly addressing OPEC since late November, when he warned the group against cutting supply. Saudi Arabia and Russia led the cartel and its allies in cutting output regardless, eventually leading to an oil prices rally at the start of 2019.
The Tweet followed another set of fresh three-month highs for oil prices following a jump in global risk assets after the President said he would delay new tariffs on China-made goods, which were set to kick-in on March 1, thanks to what he called “substantial progress in trade talks between Washington and Beijing.
Crude has risen by approximately 30 per cent so far this year and was near $66 a barrel on Monday, but remains well below the four-year high of $86 a barrel it hit in October last year.
Trump’s tweet will be taken as a warning to Saudi Arabia, one of Washington’s chief allies in the Middle East, not to over-tighten the market at a time when the US is targeting OPEC members Iran and Venezuela with oil sanctions.
Saudi Arabia’s oil minister told the FT earlier this month that the country planned to reduce output further in March, as it moves to tighten the market. Saudi Arabia and OPEC have faced rising supplies from the US, which has become the world’s largest producer due to the shale revolution. After Trump’s tweet oil prices slipped, losing almost $1 a barrel.
