Breakingviews - Trump can get what he wants from Saudi in 2019 | Reuters

Breakingviews - Trump can get what he wants from Saudi in 2019 | Reuters:

Even by his own standards, Donald Trump has been contradictory on oil. The U.S. president spent much of 2018 berating the Organization of the Petroleum Exporting Countries for keeping crude prices high by undersupplying the market. At the same time, he exacerbated the problem by reinstating export sanctions on Iran. An early December cut by OPEC and fellow producers including Russia is an irritant, but relatively low prices still look attainable.

On current projections, the reduction of 1.2 million barrels per day removes much of a potential glut caused by epic pumping by Saudi Arabia, Russia and the United States. Combining the International Energy Agency’s forecasts for oil demand in 2019 and its estimate for non-OPEC supply, the oil-producing bloc only needs to pump 31.6 million bpd to balance the market – 1.4 million below its November output.

Given Trump’s targeting of Iran’s 3 million bpd of production, the reduction by OPEC and its peers is unhelpful. At worst, the combination could leave supply too tight, pushing prices up again.