May 9, 2018

Crude oil prices jump with Trump's Iran deal withdrawal

Photo: Saul Loeb/AFP/Getty Images

Crude prices hit their highest levels in well over three years Wednesday morning after President Trump's decision to bail on the Iran nuclear deal and to reimpose energy sanctions after a 180-day wind down.

By the numbers: WTI crossed $71 per barrel for the first time since late 2014, while Brent crude went above $77. This morning had WTI trading at $71.04 and Brent at $77.13.

The intrigue: The market moves come just a day after Treasury Secretary Steve Mnuchin said he did not expect price hikes.

  • Per Reuters and other outlets, he also told reporters there have already been conversations with "different parties" willing to increase supply.

The Saudi response: In a widely circulated statement yesterday, Saudi Arabia said it would "work with major producers within and outside OPEC as well as major consumers to mitigate the impact of any potential supply shortage."

  • The kingdom welcomed Trump's decision to abandon the nuclear accord with its regional rival.

Quick take: U.S. and Saudi interests are only aligned up to a point. Higher crude and hence gasoline prices could hit Republicans politically.

But the Saudis, for domestic financial reasons, probably want higher prices — Bloomberg reported last month that they're targeting $80. The goal could be even more.

  • Go deeper: This Bloomberg piece last night looked at how the kingdom could navigate the post-Iran deal landscape.

Known unknowns: One of them is how many Iranian barrels come off the market in the short- and long-term.

  • A Treasury Department document released with the announcement said the U.S. will press buyers of Iranian crude to reduce their purchases even during the wind-down period.
  • S&P Global Platts reports that most analysts they've surveyed see an immediate effect of less than 200,000 barrels per day and less than 500,000 b/d after the 6 months. "But some analysts see the move eventually disrupting as much as 1 million b/d of oil supply."

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Deadly clashes erupt in Delhi ahead of Trump's visit

Rival protesters over the Citizenship Amendment Act in Delhi, India, on Monday. Photo: Yawar Nazir/ Getty Images

Delhi Chief Minister Arvind Kejriwal called for calm Tuesday as deadly clashes erupted in the city's northeast between supporters and opponents of India's controversial new citizenship law.

Why it matters: Per the BBC, a police officer and six civilians "died in the capital's deadliest day" since last year's passing of the Citizenship Amendment Act — which allows religious minorities but excludes Muslims from nearby countries to become citizens if they can show they were persecuted for their religion — hours before President Trump and members of the U.S. first family were due to visit the city as part of their visit to India.

Go deeper: India's citizenship bill continues Modi's Hindu nationalist offensive

South Carolina paper The State backs Buttigieg for Democratic primary

Democratic presidential candidate and former South Bend Pete Buttigieg speaks at an event in Charleston, South Carolina on Monday. Photo: Win McNamee/Getty Images

South Carolina newspaper The State endorsed former Southbend Mayor Pete Buttigieg on Monday night for the state's Democratic primary.

Why it matters: It's a welcome boost for Buttigieg ahead of Tuesday's Democratic debate in South Carolina and the state's primary on Saturday.

White House requests $2.5 billion to fight coronavirus as U.S. cases rise

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

The Trump administration sent a letter to Congress Monday requesting a funding commitment of at least $2.5 billion to help combat the spread of the novel coronavirus, as the number of confirmed cases in the U.S. rose to 53.

The big picture: As South Korea and Italy stepped up emergency measures in efforts to thwart the spread of the virus, WHO expressed concern about infections with no clear link to China. COVID-19 has killed at least 2,699 people and infected more than 80,000 others, with all but 27 deaths occurring in mainland China.

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