Wednesday, Aug 17, 2022
International Finance
Oil & Gas

‘Artificial’ surge in crude prices signals borderline market risk, economist warns

Daniel Lacalle, oil prices, US President, Donald Trump, OPEC, energy market
Tressis Gestion chief economist Daniel Lacalle told CNBC, sudden surge in oil prices will help to indicate energy market’s upcoming critical point

The Kingdom of Saudi Arabia is said to be content with crude prices rise up to triple digits in the near future, cited Reuters report. Bent crude rose 0.9% trading at US$74.11, while WTI climbed 0.8% trading at US$69.04.

“Oil prices are high because the dollar is low,” Lacalle said. He warned ‘massive supply management’ in the energy market will cause ‘artificial’ rise in oil prices. “That is a big concern…Because oil prices don’t generate crises; the abrupt and unexpected rise of oil prices creates crises,” he added.

US President Donald Trump blamed OPEC due to ‘artifical’ boosting of oil prices. “Looks like OPEC is at it again. With record amounts of oil all over the place, including the fully loaded ships at sea. Oil prices are artificially Very High! No good and will not be accepted,” he wrote on Twitter.

OPEC Secretary General Mohammed Barkindo in response to Trump’s tweet said: “We don’t have any price objective in OPEC, and not in this joint endeavour with non-OPEC.”

However, Josh Graves, senior market strategist at RJO Futures in Chicago said: Trump is ‘just trying to relate to his base when it comes to the retail gasoline prices, so he’s blaming OPEC for this’.

The tweet was posted right after officials from top oil exporter expressed their positive views on oil surge—and hope to see prices rise even higher. Three officials told Reuters they would be happy to oil price reach US$80 or US$100 a barrel, reported Business Standard.

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