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Donald Trump's mantra during his campaign for the presidency to the American public and American oil producers was: “Drill, baby, drill.” A key problem? Petroleum producers are not interested.
That is the conclusion of industry experts, who point out that oil producers are courted by the profitability that in pumping as much oil as possible of the soil.
Too much oil reduces prices and burning profitability, although it could make consumers happy. American shale companies are already pumping historical amounts of oil. And there is an excess of supply in the global market.
“As crude oil prices go down, we hope that industry's income will decrease and earnings decrease,” said Exxonmobile CEO, Darren Woods, CNBC last week.
The oil magnates who came in mass to support Trump want all barriers to drop and pursue alternative energy, but they also care about an excessive oil supply.
“Our actions will be absolutely crushed if we begin to grow our production in the way Trump is talking about it,” said Bryan Sheffield, a Texas oil tanker who contributed more than $ 1 million to the last Trump campaign. The Wall Street Journal.
American producers are now not looking to increase the supply, and they probably do not feel attracted to “drilling, baby drill” until prices reach an average of $ 84 per barrel, which is about 15 percent above Current, according to Kansas Federal Reserve.
American crude oil prices fell about the additional 2 percent on Tuesday when US tariffs on China entered into force and China imposed a 10 percent tax on American crude oil.
However, Trump is looking for lower prices.
After a phone call last month with the Saudi heir prince Mohammed Bin Salman, he said he planned to ask him to lower oil prices. The president asked all OPEC countries to do the same in a recent speech in the World Economic Forum in Davos. Trump argued that he would press Russia to withdraw from Ukraine, since their oil income would sink in the midst of fall prices, which makes the war too expensive.
But that is not likely to happen, according to Business Insider, and would not please US producers who would also have to compete with lower prices. OPEC members have delayed production in the last two years to increase market prices in the midst of oil prices fall, but it is expected to gradually reveal production.
According to the OPEC, analysts expect that an important excess of supply despite the prices until 2025, according to The Insider.
