The comprehensive definitions of President Trump collects with OPEC’s significant production unexpectedly to cause a “double sensation” in the oil and gas sector, which leads to a decrease in crude prices and fears high energy demand in an economic slowdown.
The customs duties, which have excluded oil and fuel imports, are still expected to increase the costs of equipment and supply for energy, construction and transportation, while it is possible to create the weakest global demand. The decision of nations and allies in OPEC, especially the Kingdom of Saudi Arabia and Russia, may add three times the increase in their expected production in additional supplies at the top of the current recession fears.
The joint ads by the White House and Obik caused an almost 7 % oil prices on April 3 with the American oil standard-NYMEX WTI per month-which is slightly over $ 66 a barrel, or approximately $ 78 a barrel when Donald Trump took office in January.
“The world has become more complicated, and expectations are more wound,” said Dan Beckering, founder and head of investment in Pickering Energy Partners.
“It is a double sensation because you have OPEC that enhances the offer, which I think was dangerous to start, but now you have this issue from the definitions higher or worse than expected,” Beckering said.
Beckering said that while the Trump administration facilitates the oil and gas industry, they do commercial work by alleviating environmental regulations and rapid permits for tracking, the sector is “somewhat clear” with the president now.
“Flowers are outside the rose. Now we have to see whether the ease of doing business can help compensate for some low price pain,” Beckering said. “I will not call the energy industry happy at the present time, but I was not completely surprised. This was a threat. Oil prices were better in the shadow of Obama and Den than what they were under Bush and Trump. Republicans facilitate commercial business, but prices were less during their systems.”
However, the American pressure pressure institute has selected instead on what Trump did not do in energy imports.
“We welcome President Trump’s decision to exclude oil and natural gas from the new customs tariff, which confirms the complexity of the integrated global energy markets and the importance of America’s role as a pure source of energy,” API said in a statement.
During the late Wall Street trading on April 3, large oil giants stocks such as Chevron and BP 5.5 % and 6.8 % fell, respectively, while oil producers in the United States decreased more severely, such as Conocophillips In about 9 % and Oxidantal petroleum In more than 10 %. Many smaller producers, including Devon Energy and DiamondBack Energy11 % or more per day.
Classy time
The announcement of the so -called OPEC+ major OPEC members in addition to Russia, Kazakhstan and Oman will add 411,000 barrels per day of additional crude oil to the global markets that start in May at a time when the basics of supply and demand were already weaker.
However, some of this may be exaggerated because the Kingdom of Saudi Arabia and others interact with the high demand for local energy during the coming summer months in their countries, and they do not necessarily aspire to flood the global market in the arms race.
“OPEC+ has reasonable causes to produce more soon,” said Reed. Unfortunately for them, they could not postpone this decision for a longer period because they need to set prices and classify sales for the next month.
“It is a very bad luck, this decision coincided with Trump’s declaration of Trump’s tariff.”
Beckering definitely agreed to the unforgettable luck. “The timing is terrible and now it is more terrifying.”
“We forget all the noise of the customs tariff. Only on supply and demand, someone will have to flash, or that the prices will reach $ 50 (for the barrel),” Beckering said, “Citing a price point where the industry can be less than profitability and significantly reduce activity.
He said that he will already reach a temporary stop and the budgets will be reduced accordingly. He added that Trump may need to impose greater sanctions on Iranian oil to help balance supply and demand. “If we don’t see it, it will become ugly or more ugly.”
The chief economist at Rystad Claudio Galimberti said that OPEC may consider high domestic demand and US sanctions on Iranian oil in its decision.
“OPEC may prepare the basis,” said Galimberty. “Trump is still likely to impose the utmost pressure on Iran.”
Although the final results of the definitions are unknown, the world is now facing a new global system.
“There is one thing really clear: the global trading matter depends on the United States, where the consumer and the borrower ends in the last resort, and the world’s economy and energy system in the world will need to adapt to a new emerging matter, we do not know its form and shape yet.”
This story was originally shown on Fortune.com
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