Oil Declines as Trump Pushes OPEC to Boost Production

Oil extended declines after President Donald Trump renewed his criticism on OPEC, saying the cartel should lift crude production.

Futures in New York dropped as much as 2 percent, after falling 0.9 percent on Wednesday. It’s “very important” that OPEC increases the flow of crude as prices are “getting too high,” Trump said on Twitter. It’s the second time this year he has urged the cartel to backtrack on its current policy of cutting production. Unlike last year, when the attacks triggered a swift U-turn in Saudi oil policy, the group has so far refused to heed his calls.

“At least for now, I think it is safe to say the Saudis will largely ignore his tweets at these price levels,” said Warren Patterson, head of commodities strategy at ING Bank NV. “Momentum was on his side with the weakness” in prices on Thursday.

Earlier this month, Saudi Arabia led the Organization of Petroleum Exporting Countries and its allies to reaffirm their commitment to output cuts, but conceded they should defer until June the decision on whether to extend the curbs. Crude has risen about 30 percent this quarter led by the bloc’s cuts, while American sanctions on Iran and Venezuela have also been supportive. Still, concerns over demand have kept prices in check.

West Texas Intermediate for May delivery dropped 70 cents, or 1.2 percent, to $58.71 a barrel on the New York Mercantile Exchange as of 9:34 a.m. local time. It fell 53 cents on Wednesday.

Brent for May settlement, which expires Friday, declined 81 cents to $67.02 on the London-based ICE Futures Europe exchange. The global benchmark crude, which has risen about 25 percent so far this quarter, was at a premium of $8.31 to WTI.

‘Take it Easy’

Trump has been quick to show his displeasure at rising prices. He tweeted in February to say that prices are too high and called on OPEC to “relax and take it easy.” Last summer, when he urged the Saudis to open the taps while he imposed sanctions on Iran, the kingdom bowed to his wishes, boosting production within a few months to record levels.

The organization displayed a different response to Trump’s subsequent request. On the eve of an OPEC meeting in December, his call to keep production high was disregarded by the group and its allies, who announced an output cutback of 1.2 million barrels a day that they’re now implementing.

Other oil-market news: After years in the shadow of the U.S. shale patch,  deep-water explorers from Royal Dutch Shell Plc to Talos Energy Inc., along with contractors, told investors at a conference in New Orleans this week they see a revival coming. Saudi Aramco will buy a majority stake in local chemical giant Sabic from the kingdom’s sovereign wealth fund for $69.1 billion. Eleven days after Intercontinental Terminals Co.’s chemical tanks erupted in flames near Houston and spread panic across the fourth-biggest U.S. city, the company’s top executive made his first public appearance after drawing criticism from a top official.

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