Trump's oil price preferences clash with market realities
Oil prices on the New York fuel exchange are falling after a series of increases. The rates are influenced by decisions made by U.S. President Donald Trump. According to the investment bank Goldman Sachs, he prefers West Texas Intermediate (WTI) crude oil to be priced between $40 and $50 per barrel.
Oil prices on the New York fuel exchange are declining after four days of increases. The current price for a barrel of West Texas Intermediate oil for June delivery is $63.36, marking a decline of 0.49 percent. Meanwhile, Brent oil for July is priced at $66.27 per barrel, a decrease of 0.54 percent following a prior rise of nearly 10 percent.
According to the White House, these rates are considered too high. Analysts at Goldman Sachs indicate that U.S. President Donald Trump favours WTI oil prices from $40 to $50 per barrel.
Daan Struyven from the investment bank notes that the President frequently comments on oil and U.S. energy issues on social media, which impacts the market.
Struyven points out that Donald Trump strongly emphasized oil and America's energy supremacy, as reflected in his nearly 900 related posts. This raises the question of how such a communication strategy tangibly affects raw material prices.
Pressure on Iran draws attention
Trump announced that the United States will apply maximum pressure on Tehran regarding oil exports, which could lead to a complete halt if an agreement on Iran's nuclear program is not reached.
Warren Patterson from ING Groep NV assesses that U.S. sanctions threats on Iran may support increases in oil prices. However, when the issue of U.S. tariffs eases, investors may shift their focus to the supply of raw materials from OPEC+ countries and their plans to increase deliveries.
The WTI oil price, currently just over $63 per barrel, has fallen by about 12 percent this year. Economists attribute this partially to U.S. tariff policy and OPEC+ countries' unexpectedly early decision to plan an increase in production.
