U.S. President, Donald Trump, yesterday, expressed concern about oil prices and repeated his previous call on the Organisation of the Petroleum Exporting Countries (OPEC), to keep prices steady.
On Monday, oil prices edged up amid political uncertainty and sanctions and involuntary curbs on several producers, but could face pressure from continued anxiety over the global economy and record U.S. exports.
Brent Crude dropped to $64.96, while WTI stood at $55.26 as at the time of filing this report.
“Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!” Trump, whose administration has sanctioned crude from Iran and Venezuela, tweeted.
The Nigerian Government had expressed its willingness to reduce oil output to help secure higher prices.
The decision came from a statement by the Presidency last week, after an envoy from Saudi Arabia called on the African nation to adhere to a deal on production cuts.
Meanwhile, as the oil market continues to tighten significantly, Brent Crude oil prices could reach $70 to $75 a barrel in the near term, with an upside potential of exceeding the $67.50 a barrel forecast, according to Goldman Sachs.
The outlook for the oil market through the end of June 2019, is modestly bullish, the investment bank was quoted as saying in a research note on Monday.
Yet, Goldman Sachs sees a possible Brent Crude jump into the $70s as fleeting, because U.S. oil exports and a possible easing of OPEC’s production cuts in the second half of the year could cap the bullish sentiment.
OPEC’s cuts and possible acceleration of Venezuela’s supply disruptions will support oil prices in the coming months, according to the bank.
“While prices could easily trade in a $70-$75 a barrel trading range, we believe such an environment would likely prove fleeting,” said Goldman’s analysts, who kept their end-of-the-year Brent Crude forecast at $60 a barrel.
Last week, oil prices hit fresh 2019 highs, driven up by optimism that the U.S. and China will forge a trade deal, and that OPEC’s resolve to rebalance the market will outweigh soaring U.S. oil production.
Earlier this month, Goldman Sachs said it expected Brent Crude prices to hit $67.50 a barrel in the second quarter of the year, as ‘shock and awe’ production cuts by OPEC and increased supply disruptions coupled with healthy demand and seasonal inventory declines to drive prices higher.
“Producers are adopting a ‘shock and awe’ strategy and exceeding their cut commitment,” the investment bank said in a research note from February 12.
OPEC members and non-OPEC producers such as Russia, are leading efforts to rebalance the market and support oil prices.
Trump, who has made the U.S. economy one of his top issues, had repeatedly tweeted about oil prices and OPEC, airing complaints about higher prices, ahead of the organisations meeting in December.