Above, Bloomberg report on oil prices is a good bookend for my column of this week, here.
It’s a peculiar situation in that so many segments of Trump’s base supported him with the idea that he was definitely NOT going to do the things that he was promising to do – and now they’re saying “We didn’t vote for this!”.
Go figure.
As I’ve discussed – there is a fundamental mismatch between MAGA’s goal of Drill Baby Drill, lower gasoline prices, and the interests of the Oil oligarchs who elected Trump, hoping to make more money. These things do not go together.
Major global oil producers in the group known as OPEC+ did exactly what U.S. President Donald Trump has been asking for — and American oil producers may be the ones to soon pay the price.
The group, led by Saudi Arabia, announced on May 3 that it would accelerate its plans to boost output in June for a second month in a row, prompting a drop in oil prices to their lowest level in more than four years.
The group’s decision has triggered a supply surge, despite crude oil sliding to the low-$60s per barrel — and U.S. shale producers are “feeling the squeeze,” economists at Allianz Research, led by Ludovic Subran, wrote in a note Friday.
OPEC+ said it would increase production in June by 411,000 barrels per day. That would follow an increase of the same amount for the month of May. The monthly increases are three times larger than the group had originally planned under its phaseout of 2024 voluntary production cuts by eight of its members that had totaled 2.2 million barrels a day.
U.S. and global benchmark oil prices fell sharply in the wake of the group’s announcement. On May 5, front-month futures prices for West Texas Intermediate crude
settled at $57.13 a barrel on the New York Mercantile Exchange while Brent crude
BRNN25 settled at $60.23 on ICE Futures Europe — with both ending at their lowest levels since Feb. 5, 2021.