Oil prices are still in washout mode after a report that the Trump Administration asked OPEC to please raise oil output by 1 million barrels a day, Bloomberg News reported. The U.S. government has quietly asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels a day, according to people familiar with the matter. The rare request came after U.S. retail gasoline prices surged to their highest in more than three years and President Donald Trump publicly complained about OPEC policy and rising oil prices on Twitter.
That confirms the hints by Saudi Arabia and Russia that they were considering raising that amount anyway. What a coincidence! Still, in the big picture, 1 million barrels will help but won’t solve the problem. While oil is still in technical price trouble in the short term the correction should soon be over. We should see a big 3-million-barrel drop in crude supply, in tonight’s API report.