Donald Trump spent some time shouting at reporters over the loud din of Marine One’s rotors on Friday, as he departed the White House for the NRA convention.
As you can imagine, he covered quite a bit of ground. At one point, he claimed to have called OPEC in an effort to bully the cartel into driving down oil prices. Here’s the quote:
Gasoline prices are coming down. I called up OPEC and I said ‘you’ve gotta bring em down. You gotta bring em down.’ And gasoline is coming down.
There are a couple of things to note about that soundbite.
First, he could be making it up. Last year, Trump was very successful in badgering OPEC to bring down prices and ultimately succeeded in engineering a veritable collapse in October and November, prompting action from the cartel and allied producers in early December. Trump did in fact place calls to King Salman in 2018, so it is possible the US president called Riyadh this week.
Additionally, you’ll recall that there was a coordinated effort on the part of the White House and the Saudis to allay fears that the looming expiration of waivers on Iran crude purchases will drive prices markedly higher. With his Friday comments, Trump is obviously trying to suggest that he’s made separate calls. That might well be a complete lie. If it is, he’ll just point to conversations the administration has had with producers over the last week and claim that’s what he meant.
Read more on the Iran waivers decision
Second, this is probably the beginning of what will ultimately morph into a broader effort to bully OPEC into pushing prices lower in the wake of the Iran exemptions decision. Trump has never been willing to accept the contradiction inherent in his “tough on Iran” foreign policy and his insistence on cheap crude. Exactly nothing suggests he’s ready to come to terms with the competing nature of those two policy goals now. So, it could very well be that he hopped on the phone to King Salman this week and (again) demanded action.
Whatever the case, crude extended losses when Trump’s comments crossed the tape.
This comes on a day when the crude rally was already losing steam.
If you ask Nomura’s Charlie McElligott, CTAs started deleveraging when WTI broke through 64.97 overnight, going from ‘+100% Long’ to just ‘+26% Long’. To wit (from Charlie’s brief Friday note):
Here was the set-up going-into today: “WTI, currently 100.0% long, [65.21], selling under 64.97 (-0.37%) to get to 26% , more selling under 61.87 (-5.12%) to get to -27% , flip to short under 61.88 (-5.11%), max short under 59.1 (-9.37%)â€
Ultimately, crude fell almost 3% on Friday, enough to wipe away gains logged earlier in the week on the heels of the Iran news.
OPEC Secretary General Mohammad Barkindo and officials in Saudi Arabia would later say they have not in fact spoken with Trump about lowering prices. But you can be sure they will now – speak to him, that is.
Oh, and Trump is lying about gas prices “coming down”. The national average is $2.883, up from $2.839 a week ago.
As always, his base will not understand the difference between crude prices and the price for refined product at the pump (even though they are most certainly not holding any WTI futures contracts, on the contrary, the only price they know is the one at the pump).
Yet, if the submoronic buffoon screams “I called OPEC” and Fox “Business” shows some chart of WTI prices heading south they feel totally confident in screeching “best president ever”.
#sad
I called OPEC is just as funny as the 3.2 GDP.
yeah.
But his followers will gobble it up regardless.
You can see it in his Twitter threads as well ( i know, i know), there is always someone going by the name “proud deplorable Larry” stating ” the economy is up by 8,000 points” as one of Trumps great achievements.
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