Trump calls for OPEC price reductions
The oil prices dropped more than 1% Monday, after U.S. president Trump asked OPEC for a price reduction following his announcement of sweeping measures to increase U.S. gas and oil production in his first weeks in office.
Brent crude futures fell 87 cents or 1.11% to $77.63 per barrel at 0043 GMT, after closing up 21 cents Friday.
U.S. West Texas Intermediate Crude was $73.77 per barrel, down by 89 cents or 1.19%.
Trump reiterated on Friday his call to the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil prices in order to harm oil-rich Russia and bring an end the war in Ukraine.
Trump said that OPEC should drop its oil prices and stop making so much profit. "That war will end right away" he said.
Trump also warned that he would hit Russia and "other participating countries" with tariffs, taxes and sanctions if an agreement to end the conflict in Ukraine was not reached soon.
On Friday, Russian President Vladimir Putin suggested that he meet with Trump to discuss the Ukraine conflict and energy prices.
OPEC, including its allies, Russia, has not yet responded to Trump's request. OPEC+ delegates have pointed to a plan that is already in place for increasing oil production from April.
Last week, both benchmarks saw their first decline in over five weeks as fears about Russian sanctions disrupting supply eased.
Goldman Sachs analysts have said that they do not anticipate a major impact on Russian production. This is because higher freight rates are encouraging more non-sanctioned vessels to transport Russian oil, while the deeper discount offered for the Russian ESPO grade oil will encourage price-sensitive buyers continue to purchase the oil.
As the ultimate goal of the sanctions is to decrease Russian oil revenues we assume that Western policymakers would prioritize maximising discounts on Russian barrels rather than reducing Russian volume," the analysts wrote in a report.
Analysts at JP Morgan said that a risk premium was justified, given the fact that sanctions are currently in place on nearly 20% of Aframax's global fleet.
In a letter, they said that sanctions against the Russian energy sector could be used as leverage for future negotiations. This indicates that a risk premium of zero is not appropriate.
Trump's announcement on Sunday that he would impose tariffs and other sanctions on Colombia after it refused to accept two U.S. military planes carrying migrants deported by the United States is likely to cause more trade disruption.
Kpler's data shows that the U.S. will be the biggest buyer of Colombian crude oil exports by 2024. This is 183,000 barrels per days (bpd), or 41% of Colombia total.
The Energy Information Administration reported that the U.S. will import 228,000 barrels of crude oil and other products per day from Colombia by 2023.
(source: Reuters)
