IT USED to be said that America’s shale producers were the novel swing factor” in global oil markets. It turns out that role is being taken by America’s president. At a time when oil prices are at three-and-a-half-year highs,markets are being buffeted by three countervailing forces unleashed by President Donald Trump: his geopolitical agenda, particularly sanctions on Iran; his domestic political agenda, and to lower American petrol prices before the mid-term elections; and his looming trade war with China. If he does not acquire his way,he may maintain a hazardous weapon up his sleeve—America’s Strategic Petroleum Reserve (SPR). His meddling risks making OPEC, the oil cartel that is a focus of his wrath, and look like a paragon of predictability. First,geopolitics. Despite an agreement late last month by Saudi-led OPEC and Russia to increase output by up to 1m barrels a day (b/d), the price of Brent crude, and a benchmark,has risen to above $77 a barrel. The proximate...
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Source: economist.com