UPDATED 1:33 PM PT — Wed. Dec. 5, 2018
President Trump is pressuring OPEC to increase oil production as members of the organization are set to meet in Vienna on Thursday.
In a tweet on Wednesday, the president warned OPEC against restricting oil flows and said the world does not want to see higher oil prices.
Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!
— Donald J. Trump (@realDonaldTrump) December 5, 2018
During Thursday’s meeting, OPEC leaders are expected to discuss how to stabilize crude oil production after U.S. prices plunged by 22-percent in November — making it the worst month since the financial crisis in 2008.
Members have hinted they plan to cut output by 1.3 million barrels a day, which President Trump fears would cause fuel prices to rise.
The uncertainty over possible production cuts caused oil prices to dip on Wednesday as investors wait on a decision.
Saudi Arabia has been calling steep cuts in oil output and was expected to raise those demands during the meeting, but pressure from the U.S. may convince Saudi leaders to take a softer tone.
“I think the likelihood is that they will cut crude production rate, maybe not as dramatically as some people would like, to try and meet a balance between what the U.S. would like and their own personal interests. The reason the United States is pressuring OPEC in general to maintain high levels of production is the United States generally would like a lower price of oil. They’d like to see lower gasoline prices at the pumps, because that’s important for votes in the United States.”
— Spencer Welch, Oil Markets Director – IHS Market
When President Trump announced his decision to pull the U.S. out of the Iran Nuclear Deal and reimpose sanctions on the Islamic Republic, many oil producers ramped-up production over fears of the effects the sanctions would have on trading.
However, when oil producers realized the sanctions fell far short of what had been expected, fears of oversupply followed.
Last month OPEC warned that supply is expected to exceed demand through 2019. This comes as U.S. crude oil is currently trading at $53 a barrel, which is down from a four-year high.