Saudi Arabia to Defy Trump with Oil Cut Agreement

Saudi Arabia will likely move to cut its oil output in order to prop up crude prices, against Donald Trump’s demands to keep pumping so that prices stay low.

Analysts believe that despite Washington’s geopolitical leverage over the kingdom, after its staunch defense of the Saudi monarchy amid accusations over its alleged role in the murder of Saudi journalist Jamal Khashoggi, Riyadh will still pursue its own economic interests rather than abide by the wishes of President Trump.

Brent crude graph

The pivotal question hanging over oil markets remains that of production cutbacks. Who will tighten their taps, and by how much?

The answers to these questions will be negotiated by the world’s largest crude producers — Russia, Saudi Arabia and the U.S. — at this week’s G-20 meeting in Buenos Aires, Argentina, and then at the OPEC+ meeting in Vienna, Austria, the following week.

The spectrum is huge, ranging from a potential 500,000 to as many as 2 million barrels per day (bpd) taken off the market, according to Ehsan Khoman, head of MENA research and strategy at the Dubai branch of Japanese bank MUFG.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza