Oil prices took a tumble on Friday, with Brent Crude falling 4.55% to below $60 a barrel – its lowest level for a little over a year – as supplies continue to swell after US President Donald Trump tells Saudi Arabia to not cut production.
The House of Saud is caught in a difficult situation, with the oil producing country interested in cutting supply to increase oil prices as the decline seen in recent weeks is hurting the kingdom’s coffers.
But Trump’s support of the kingdom’s leader crown prince Mohammed bin Salman following the murder of journalist Jamal Khashoggi is clearly a factor in the country’s decision to not cut production.
Trump helps fuel over supply of oil
Earlier this month, Trump took credit for falling oil prices after claiming that his tough stance on OPEC and sanctions his administration is imposing on Iran were fuelling crude’s decline.
During a White House press conference after Republicans lost control of congress in the midterm elections he told reporters why he waived an oil embargo on Iran for 180 days.
‘I gave some countries a break on the oil,’ Trump told reporters. ‘I did it a little bit because they really asked for some help, but I really did it because I don't want to drive oil prices up to $100 a barrel or $150 a barrel, because I'm driving them down.’
‘If you look at oil prices they've come down very substantially over the last couple of months,’ he added. ‘That's because of me. Because you have a monopoly called OPEC, and I don't like that monopoly.’
Other forces behind oils decline
Even though Trump would like to take all the credit for tumbling oil prices, there are several forces at play that are driving crude’s decline.
Growing supplies in the US and signs of a global economic slowdown have applied pressure on oil prices too, with the West Texas Intermediate (WTI), a key US price marker, down 6% to $51.32 on Friday at 4:50pm GMT.