Oil prices fell by more than two per cent on Monday, reversing earlier gains after US President, Donald Trump, told Organisation of Petroleum Producing Countries (OPEC) producers to “relax” as prices were too high.
Brent crude oil futures were down $1.43 at $65.69 a barrel at 1403 GMT, having earlier risen to a 2019 high of $67.47. West Texas Intermediate (WTI) crude futures were down $1.38 at $55.88 a barrel.
“Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!’’ Trump tweeted.
Members of OPEC, together with non-OPEC producers such as Russia, agreed to cut production by 1.2 million barrels per day this year. The cut is to help balance the market and support prices.
The oil price has risen by around 20 per cent this year, aided primarily by OPEC’s production cuts, as well as US sanctions on exports of crude from Iran and Venezuela.
Trump has frequently blamed high oil prices on OPEC while the US has become the world’s largest supplier thanks to shale output.
Monday’s comment, one of a series of tweets or comments he has made regarding oil prices since April 2018, follows a rally in crude prices in recent weeks supported by a tighter supply outlook.
They are still significantly lower than the peak of more than $85 a barrel hit last October. Trump’s comment came a day after he said that there could be “very big news over the next week or two” in trade talks between the US and China. Concerns of global trade wars weighed on oil prices earlier this year.
“Supply risk is ever present with Venezuelan tensions brewing a notch higher … the National Oil Corporation in Libya refusing to start production at the El Sharara field,’’ Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum.
Goldman Sachs analysts said on Monday that, “the near-term outlook for oil is modestly bullish over the next two to three months.”
He added that the outlook for later in 2019 was weaker due to surging US exports and an “an increasingly uncertain economic, policy and geopolitical backdrop.”