- Oil Rebounds Following Trump Threats
Global oil prices rebounded on Thursday after President Trump ordered the United States Navy to shoot and destroy Iran’s vessels if they posed a threat.
The US West Texas Intermediate oil that plunged to -$37.47 per barrel on Tuesday rebounded by 14.22 percent to $15.74 a barrel on Thursday.
Accordingly, the crude oil, against which Nigerian oil is priced, rebounded from about $19 a barrel to $22.26 on Thursday morning during the Asian trading session.
Oil prices plunged to a record low earlier this week after data shows over 30 million barrels per day drop in global demand for the commodity. This, coupled with rising oil inventories amid global lockdown weighed on oil outlook.
However, it was Trump’s comment on Wednesday that bolstered oil outlook.
The president had tweeted that he instructed the US Navy to shoot and destroy Iranian gunboats if they harass American warships.
“I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea,” President Trump stated in a tweet.
Meanwhile, there were reports that OPEC members met via phone on Wednesday to discuss additional cuts as the 9.7 million barrels per day announced about two weeks ago failed to prop up prices and reduce global oil glut.
Analyst at JBC Energy said: “The logistical realities of tank tops and mounting offshore storage require swift action, with refineries no longer a reliable taker of crude as their own product inventories fill to the brim.”
It is uncertain if OPEC members plan to change their current position to rescue the oil market given the size of global oil glut.
