MENU

President Trump just had a crude awakening on Twitter

Not content with complaining that the terms of global trade for the U.S. are unfair, President Trump is now taking to digital soapbox Twitter to regularly complain that oil prices are too high.

This afternoon benchmarked brent oil futures are trading for US$77 a barrel of oil equivalent, with the oil price climbing steadily for much of the past year.

The oil price is rising mainly because the OPEC member group of oil-producing nations and Russia are colluding to manage supply in such a way that supports prices.

In the past the straight-talking president has described OPEC as a “cartel” and “total illegal monopoly” even suggesting that if a business existed like it in the U.S. “everyone would be thrown in jail”.

It seems the President is upset at the higher prices as much of the U.S. electorate prefers cheaper petrol prices when it comes to filling up their gas-guzzling automobiles.

The demand to “reduce pricing now” may fall on deaf ears though as the U.S. and OPEC are more like historical enemies than friends, with the wild swings in oil prices a reflection of this reality.

Lower oil prices are not just a policy objective of President Trump, but the U.S. Congress more generally on a bipartisan basis, which is one reason why I remain bearish on the long-term direction of energy prices. The kicker being the potential for U.S. shale oil and new extraction technologies to keep lifting supply at lower marginal costs of production.

Even the Saudis themselves don’t seem optimistic on the medium-term future of oil prices given they are preparing to auction off state-owned oil producer Saudi Aramco in what is being described as potentially the biggest IPO of all time.

As such investors in the likes of Santos Ltd (ASX: STO), Woodside Petroleum Limited (ASX: WPL) and Oil Search Limited (ASX: OSH) are likely to be in for a volatile ride given their leverage to the swings in oil prices.

The ASX small cap up 285% with no sign of stopping...

One Australian company has developed a state of the art device that's revolutionizing hospitals all over the world. Even better, this device is so profitable that the company rakes in 90% margins. That's a lot of cash. So no wonder the stock's up 285% since 2008 – with no signs of stopping...

To discover the name and code, simply click the link below. You'll discover our expert's #1 medical technology pick... and you can decide for yourself whether to get invested today.

Click here to claim your free report.

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!