On Thursday afternoon, oil prices fall below 69 bars to the lowest seven-month highs. Oslo Stock Exchange is withdrawn from attraction and reduced by 0.90 percent.
"Donald Trump certainly set it tweeted yesterday, where he puts a wide side," says analyst analyst Bjarne Schieldrop SEB.
Trump made a clear message to the Opec Oil Cube about what he hopes will do in the future.
"It is hoped that Saudi Arabia and Opec will not be cut short in oil production. He wrote about Twitter, oil prices should be much lower.
"I was surprised"
The announcement came after Saudi Arabian energy minister Khalid Falih said Monday that he would reduce oil production in order to correct the "over-corrected" market.
"It is clear that Trump is targeting both exports from Iran to reduce the Iranian economy and the fact that oil prices are as low as possible. But if Iran reduces oil exports by 20 percent and simultaneously increases oil prices by 20 percent , it's clear that this does not harm so much, says Schieldrop.
"But I was surprised that he continues to put pressure on it. There is a clean debate between Donald Trump and Saudi Arabia. He obviously wants the oil price to be as low as possible to exert pressure on Iran, but then Saudi Arabia can accept Saudi Arabia should live, he says.
Saudi Arabia, which is heavily reliant on oil revenues, said in advance that they want oil to cost more than $ 70, but after the killings of journalists Jamal Khashoggi killed, the political influence of the government has weakened. Therefore, they are thoroughly fighting shortly, says Shieldrop.
"Confusion and Schizophrenia"
The second possible explanation for falling oil prices is that people are stupid.
Recently, US oil stocks have risen sharply due to pipeline infrastructure in the country. This makes American light oil bigger and you get a much larger supply and thus a lower WTI oil price (American light oil). It can be interpreted as an investor, because it offers an increase in demand, and so you do it accordingly. Thus, prices will decrease.
"But global stocks have been on the side since the beginning of October," said Schieldrop.
– Then the investors are stupid, then?
"As a rule, the market is a bit stupid, that's it, he says.
Schieldrop says world oil stocks have fallen by 40 million barrels this year and that North Sea oil, used as a reference for oil sales worldwide, is followed by a decline in US oil reserves.
"There is some kind of confusion and schizophrenia in this market," he says.
I do not think that Opec will make it
He has absolutely no belief that Opec and the cooperative state of the cartel are prepared to give up what they have achieved, since they decided to reduce production by the end of 2016, in order to bring a large amount of oil into the stock. Since then, oil prices have risen by several tens of dollars.
"There are none of these manufacturers who are interested in seeing stocks grow in the world, which means that oil surplus from world stocks. This means that you are getting low current prices (market price is now red.anm.) Against longer contracts, ie you is to sell his physical oil at a discount for longer contracts, he says.
"Now, we will gradually progressively move to the Opec meeting in December, and I'm pretty sure that we will see announcements that, of course, we will not have a contango for North Sea oil," he said.
Contango is an expression that means that the price of a tradable item at this point is lower than futures, that is, the price of the item with pre-delivery. Therefore, in the contango market it does not pay for selling its oil here and now.(Regulations)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our affairs through a link that directly links our pages. Copying or any other use of all or part of the contents may take place only with the express written permission or in accordance with law. For more information, please see here.