Donald Trump's Cheap Oil Dream Can Still Come True
Crude’s rally has been stalled for a month. Lower output in Venezuela and elsewhere should be a godsend for bulls, but demand worries are growing.
The flow of crude from OPEC to the U.S. is at its lowest point in five years. But that doesn't mean the oil price has to rise.
Photographer: Carlos Becerra/Bloomberg
As winter keeps its grip on the northern hemisphere it is the oil bulls, not the bears, who have gone into hibernation. The price rally that greeted the new year has fizzled out as renewed concerns about demand growth outweigh the tightening of oil supply through OPEC cuts and U.S. sanctions.
Saudi Arabia had already started to deliver on its promised output reductions in December and went beyond what was pledged in January. U.S. production growth has stalled — for now — and President Donald Trump’s sanctions on oil flows from a second OPEC producer (Venezuela joins Iran on the naughty step) will cut supplies even further.