Three forces are driving global oil prices 2
The Organization of the Petroleum Exporting Countries (OPEC) has lost control of the global oil market.
While OPEC countries are still struggling to find common purpose, the US, Russia and Saudi Arabia have dominated global supply.
Global crude oil has cooled 20% over the past 6 weeks.
In June, Saudi Arabia and Russia were the two pioneer countries to call on OPEC and other countries to relax production restraint policies that have been applied since early 2017. After that, both gradually raised production to nearly
This increase, along with lower forecast oil demand growth and Mr. Trump allowing eight countries to continue buying oil from Iran in the next half of the year, has caused the market to go from worrying about lack of supply to worrying about oversupply in just 3 months.
As prices fell, Saudi Arabia said it would reduce exports by 500,000 barrels of oil a day next month.
Bin Salman needs oil revenue to finance his ambitious Saudi Arabia reform plan.
However, this plan is facing challenges from Presidents Putin and Trump.
Perhaps Mr. Putin has not decided whether to sacrifice a little to maintain good political relations with the Crown Prince of Saudi Arabia or not.
Mr. Trump’s opposition to Saudi Arabia is greater.
In addition to Mr. Trump’s tweets, Saudi Arabia is also concerned about production activities in Texas.
In short, experts say that to balance the oil market next year, Saudi Arabia will have to deal with a series of challenges.
