Oil prices fall after Trump’s showdown with Opec
Oil fell today after President Donald Trump said he “called up” the Opec oil cartel to demand they bring down prices.
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“Gasoline prices are coming down. I called up Opec, I said you’ve got to bring them down. You’ve got to bring them down,” Trump told reporters, Reuters said.
Brent crude oil dropped 3.78 per cent to $70.85 per barrel while WTI cryde fell 4.20 per cent to $62.47 on the comments.
Chris Beauchamp, chief market analyst at online trader IG, warned prices “are in freefall” after Trump’s remarks.
“The rally in oil has been built on the idea of limited supply, and while this thesis was already being questioned, the afternoon has seen plenty of selling as investors worry that Opec will respond more quickly to the cuts in Iranian output than previously expected,” he added.
“The rally probably isn’t done, but a bout of volatility looks likely for the time being,” Beauchamp said.
The fall follows Brent climbing above $75 a barrel yesterday after Russan crude oil imports into Europe were suspended due to fears of its quality.
As markets close, the FTSE 100 fell by as much as 20 points following news the US economy grew 3.2 per cent in the first quarter of 2019 compared to the same period last year.
The US economy got a boost to its growth rate from inventories and trade to offset slower growth in consumer and business spending.
Trump hailed the figures as better than expected.
https://twitter.com/realDonaldTrump/status/1121782348469522435
However, the FTSE did not rally, instead closing around eight points down after trimming losses, while Nasdaq stood 0.8 per cent down.
David Madden, market analyst at CMC Markets, said while US GDP beat expectations of 2.3 per cent growth, the dollar did not take off as investors realised it could have been better.
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“The inventory spending was high, and fixed investment was weak, and that suggests that things are not as bullish as they seem. That being said, the US should economy is on track for a strong 2019,” Madden said.
The dollar fell marginally lower against sterling, dropping from 77.5p to 77.3p.