Saudis Must Risk Trump's Wrath to Balance Oil Market: Julian Lee - Bloomberg:
Saudi Arabia needs to cut oil production and persuade fellow producers to follow suit if it is to avoid a further price rout. That risks angering President Donald Trump at a time when the U.S. is still considering its response to the assassination of Jamal Khashoggi, writes Bloomberg oil strategist Julian Lee.
Oil forecasts for 2019 from the International Energy Agency and the Organization of the Petroleum Exporting Countries show global stockpiles rising next year by as much as 1.7 million barrels a day, if OPEC continues producing at the current level of close to 33 million barrels a day. Saudi Arabia’s pledge to reduce daily exports by 500,000 barrels next month did little to reassure the market and earned a swift rebuke from the White House via Twitter.
If it cuts output, Saudi Arabia risks antagonizing the U.S. president just as Congress considers sanctions in response to the killing of Khashoggi at the kingdom’s consulate in Istanbul on Oct. 2. U.S. lawmakers have taken a much tougher stance against Crown Prince Mohammed bin Salman than has President Trump. Cutting production to boost prices while Trump is tweeting that they need to fall risks eroding his support for the Saudi leadership and perhaps weakening his opposition to sanctions
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