BUSINESS

OPEC ignores Trump’s warning as crude oil crosses $80 per barrel

The OPEC crude oil price this week crossed $80 per barrel, the highest price since 2015 as OPEC countries ignored the warning of the US President Donald Trump regarding reduction in oil prices.

In 2017, the average OPEC crude oil price ended at US$52/barrel that has steadily crossed 80 dollars a barrel on Sept 27, 2018. Thus in 2018, the OPEC countries have increased their crude oil price by $28 dollars/barrel since January.

The OPEC crude oil was trading around $76/barrel when the American President Trump gave a stern warning to the Arab oildoms against consistent hike in prices and ordered them to cut the prices, but during this week the crude oil of OPEC has crossed the benchmark of $80/barrel that means the Gulf countries, exporting more than 75 percent of the world oil, paid no heed to the warning of Trump.

Interestingly, the OPEC has anticipated 69 dollars per barrel average price for the year 2018, but if the crude oil value continued to mount further, it will settle much above the projection of the oil exporting countries in the Gulf.

Accusing the OPEC oil cartel of ripping off the world, US President Donald Trump warned in a speech to the United Nations General Assembly this week that Washington wouldn’t stand idly by as fuel prices continued to rise.

“We defend many of these nations for nothing and then they take advantage of us by giving us high oil prices. Not good,” he declared, referring to OPEC’s mainly Middle Eastern members, and how the price of oil is at a four-year high.

Hinting that his administration would take action to halt further price increases, Trump said the US was “ready to export our abundant, affordable supply of oil, clean coal, and natural gas.”

OPEC has been limiting output for the past 18 months following a steep price downturn when the global economy recovered from the 2008/09 financial crisis. Stabilization measures have seen prices rise to between $70 (€59.9) and $80 per barrel, leading the cartel to agree in June to raise production by 1 million barrels per day.

 

By: Javed Chaudhry