Enjoy those inexpensive fill-ups while you can. The price of oil on the New York exchange had its biggest single-day gain in history on Thursday, gaining 24% after President Donald Trump publicly pledge to intervene in the oil price/production standoff that (along with the COVID-19 pandemic) has pushed oil prices down 60% for the year to date.
President Trump told reporters he was searching for “medium ground” in the oil price war. We can only assume he meant “middle ground” as “medium ground” is more applicable to coffee than oil.
“It’s very devastating to Russia, because the whole economy is based on that, and they have the lowest prices in decades.”
“I would say it’s very bad for Saudi Arabia. But they’re in a fight, they’re in a fight on price, they’re in a fight on output.”
Then Trump threw out the line that sent oil prices soaring,
“At the appropriate time I’ll get involved.”
President Trump failed to mention the United States, which is odd, both because he is the president and because the United States (and not Russia or Saudi Arabia) is the world’s largest oil producer. And not by a little. The United States averaged 15,043,000 barrels per day in 2019. Saudi Arabia averaged 12,000,000, while Russia averaged 10,800,000.
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Is President Trump unaware of how a single comment from the President of the United States can roil global commodity markets.
Or perhaps he just loves to fluff his ego by playing God?
Perhaps most sinister, maybe he does these things because he and those close to him use these opportunities to profit off the very restlessness in the market Trump creates?
But remember, it is not only a matter of Trump and his inner circle profiteering. American taxpayers are paying the price.
Last week, President Trump ordered the Department of Energy to fill the Strategic Petroleum Reserve to help domestic oil producers maintain the flow of product during this period of dramatically reduced demand.
The Department of Energy announced an initial solicitation seeking to purchase 30 million barrels of oil, with a goal of acquiring 77 million barrels in the nest three months.
With just SEVEN word today, “At the appropriate time I’ll get involved,” President Donald Trump increased the taxpayer’s cost of that purchase by nearly $375 million. Remember that next time you fill up, or better yet, next time you vote.