President Trump with South Carolina Governor Henry McMaster last week. Photo: Mandel Ngan/AFP/Getty Images
A series of weekend statements about OPEC and Saudi Arabia from the Trump administration are helping to put downward pressure on oil prices.
The latest: Oil prices dropped slightly Monday, and MarketWatch notes one reason is that investors were "rattled" by President Trump's weekend tweet suggesting Saudi Arabia may sharply boost output.
The big picture: More broadly, the comments signal White House unease about the election-year state of oil markets and the limits to what they can do about it, despite the surge in U.S. shale production.
Trump's statements also highlight the tricky dynamic he faces of trying to force sharp cuts in Iranian exports, while also ensuring enough supplies in global markets to avoid price spikes.
Head-spinning: To recap the weekend action...
Early Saturday morning, Trump tweeted that Saudi Arabia's king pledged to boost production by up to 2 million barrels per day. That's a level that would go beyond the recent OPEC-Russia agreement in late June.
Late Saturday night, the White House softened the comment, noting King Salman reaffirmed the Saudi's readiness to use some of its 2 mbd spare capacity to help balance the market.
Sunday morning on Fox News, Trump took a critical posture, claiming OPEC is "manipulating" the market; "has to" pump more; and that the 1 million bpd increase OPEC and Russia agreed to last month is too low.
Thought bubble: As Axios' Steve LeVine noted yesterday, Trump's talk with Salman put the U.S. back in the pre-shale age, when presidents routinely went to the Saudis asking and sometimes pleading for boosts or cuts in production for U.S. economic purposes.
Yes, but: The White House may have yielded some benefit from the busy weekend. The Wall Street Journal reported Sunday afternoon that White House aides saw the call as helpful...
"One measure of the call’s value is that it provoked a hostile reaction from Iran, which sees the president’s intervention on global oil production as a threat to their interests, administration aides say. On Saturday, Iran accused Riyadh of doing Washington’s bidding."
But the WSJ piece warns, "a boost in Middle East production may not be enough to stem the price rallies that have hit consumers."
