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President Trump's pressure campaign on OPEC to maintain robust supply, and therefore relatively low prices, could lead to complicated domestic political and economic compromises.
The big picture: Robert Johnston of the Eurasia group, writing for Axios this morning, points out that Trump broke with his predecessor of the GOP White House, even though they are both in the drill field:
"Trump's ongoing campaign against rising oil prices marks a shift from Republican oil policy to Bush, which generally relied more on markets to respond to high prices despite the presence of members of the Government friends of oil such as Rick Perry and Ryan Zinke, Trump has aimed to keep prices down ".
L & # 39; intrigue: As Johnston and others have pointed out recently, there are ultimately divergent interests between US oil producers and US drivers.
- Trump's attempts to face market pressure with the latter, even if he is reducing regulations and making other moves in favor of the industry.
- "Trump's energy policy is primarily the consumer, and neither the Saudis nor the markets should assume that they will support or even tolerate higher prices to help the American shale," writes Johnston.
What are they saying: A sign of the times arrived this week in Scotland. Through S & P Global Platts …
- "US President Donald Trump has provided vital" support "to activities in that country by removing regulatory barriers and speeding up decisions, BP chief executive Bob Dudley said on Wednesday, rejecting the idea that Trump's demands to lower oil prices could harm oil companies. "
But it is noteworthy that this discussion is happening under a president who campaigned on a very pro-industrial platform.
- And as my colleague Amy Harder wrote at the start of this year, Trump's other moves – especially his trade policy decisions – have won the industry.
Between the lines: In addition to the New York Times, Clifford Krauss has a good distilling of how things are with Trump's market goals, noting that the president is "playing a complicated game" because a price slump would hit workers in the oil states, including Texas, in Oklahoma and North Dakota.
- For the time being, Krauss writes, US oil prices in the $ 50 per barrel range are "close to an economic downside" that do not weigh on consumers and businesses, nor do they ruin energy producers.
- However, the recent fall in prices means that shale producers in the United States are already planning to cut spending planned for 2019, according to Bloomberg.
What's next: All eyes will be held at the OPEC meeting on 6-7 December.
- The cartel plus the mega-producer Russia will decide whether to cut the production jointly in order to strengthen the market between the expansion of supply in the United States and signs of weakening of the growth in demand.
