After yesterday’s heavy losses, the oil price has staged somewhat of a recovery today and some say that the future of the price may be tide to US President Donald Trump’s relations with Saudi Arabia.
Even though there is overwhelming evidence that the Saudi Government were responsible for the Murder of US based journalist Jamal Khashoggi , Trump has stuck by the Saudi’s and it remains to be seen whether the Saudi’s will also show their loyalty by increasing production of oil at a time when the price is falling through the floor
"I think there is a corner of the market that says, 'Well wait a second, is Saudi Arabia really going to go forward with removing so many barrels in a situation where President Trump remains a stalwart ally of the Saudi government?" said Helima Croft, global head of commodity strategy
Some analysts say the tumbling prices will force Saudi Arabia cut back on oil production because the price is so vital to their countries economy and they can’t afford to let the price go much lower.
Russia is also likely to renege on the deal to increase production, which will also help things along
"If the Saudis weren't going to cut production, they certainly are now after the price that happened today, (Yesterday)" said Anthony Grisanti, founder and president of GRZ Energy
"And if the Russians weren't on board with that, they certainly are now." He added.
If the Saudi’s do go ahead and cut production the face the wrath of President Trump and lead to the country being shun by the international community over their alleged participation in the journalists murder.
IMPORTANT: Please be informed, that our services are available for Professional Clients only.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.