Trump loses the # oil lobby if the #American # oil price does not recover. All that remains for him as a #sponsor for his # election campaign is the #weapon lobby. If #Trump loses something, he becomes irascible and ugly like a small child under constant stress. The lies then get bigger and he wants to worry about himself after more distraction. Maybe a war if necessary? A lot is possible with Trump.
Articles from around the world:
„The big bet against America
For the first time in history, the oil price drops below zero dollars.
This is a disaster for the US extractive industry and for Donald Trump. The president made a risky deal – and lost it.
The Cape Town coast is probably the best bet. From there, the route to the three most important ports is roughly the same length. Houston, Rotterdam, Singapore – the captains can reach them in 30 to 40 days with a speed of ten knots.
Many drilling companies are currently renting tankers to collect their oil because the onshore storage facilities are overflowing. Analysts say 160 million barrels are currently parked at sea, mostly off South Africa. 60 ships, strategically positioned like chess pieces, are waiting for the moment when the world needs its goods again.
Only one of the major oil nations cannot participate in the game: America.
The corona virus is paralyzing the global economy and the need for oil is falling. Production has been larger than demand for several weeks. All sponsors therefore have to solve one question: where to put the surplus?
Bringing Brent oil from the North Sea is relatively easy because you can pump it quickly onto the tanker. The US companies, however, do not have this option. And that should be the government of the country, President Donald Trump will soon get into trouble.
The most important US variety, West Texas Intermediate, WTI for short, crashed dramatically. On Monday the price even fell into negative territory. In New York, the price per barrel was now minus $ 40.
The producers had to pay customers to buy the oil. There has never been anything like this in the history of global commodity markets. Brent stayed in the positive range and was trading for around $ 26 the barrel.
How did this crash come about? The largest deposit for WTI is located in Cushing, a dusty small town in the state of Oklahoma, almost 1000 kilometers from the nearest port. America’s producers cannot simply park their oil at sea and wait for the global economy to pick up again.
And the Cushing tanks are full. That’s why companies have to get rid of the oil quickly, at any cost, even for a negative one.
There is also a technical effect. The negative price affects contracts for May that end on Tuesday. Traders who have only speculated on the price but do not want to have delivered oil must urgently sell these contracts.
Only now, in the Corona crisis, at a time when factories all over the world are at a standstill and half of humanity lives with curfews, she doesn’t want anyone. The result: the oil price reaches historic lows.
Full tanks, expiring contracts – all the explanations cannot hide how devastating this crash is. America’s most important sub-zero oil is a symbol. The US government, it now becomes clear, has failed with its petro-diplomacy.
The fact that the price of the barrel of the US reference grade WTI in the Asian markets in early trading rose again to $ 1.10 on Tuesday is only a small consolation for the country.
US President #Trump is the # loser
Donald Trump is the loser of a deal with Saudi Arabia and Russia. The Republican made every effort to help the domestic oil industry, which is one of his most important supporters.
Elections are held in the United States in November. Trump needs the oil companies‘ money for his campaign. And the workers‘ votes for his re-election.
Trump agreed with Mohammed Bin Salman, Crown Prince of Saudi Arabia and ruler of Opec, and Vladimir Putin to cut funding. Minus ten percent, this is what their agreement provides for.
An extraordinary step. America and Russia, Trump and Putin, are joining forces to save the oil price. But it didn’t work. WTI crashed. And Trump, who often boasts of being a dealmaker, is a loser.
And it doesn’t look like the oil price will recover soon. „At the moment there is hardly anything that could stop the downward trend,“ says Michael Tran, raw materials expert at RBC Capital Markets.
Saudi Arabia and Russia, says the analysis company IHS Markit, are better able to cope with low prices. The funding costs are lower in both countries, and their producers are state-owned. In the US, on the other hand, many drilling companies will go bankrupt.
Do foreign policy with oil
Fracking has recently boomed here, the controversial process in which oil is blasted out of deep rock with a mixture of sand, water and chemicals. The United States rose to become the largest oil supplier in the world, Trump declared an era of „energy dominance“. America’s oil should become a foreign policy tool. But there is not much left of that now.
And the minus price shows something else: that the US economy is in bad shape. The curfews have a particularly negative impact on retail, one of the most important pillars of the economy.
There, sales slumped 8.7 percent last month, the biggest drop ever recorded. The corona pandemic has cost 22 million Americans the job in the past four weeks.
And the oil speculators, as the price drop shows, do not seem to believe that Trump will quickly improve the economic situation. Your bet against WTI is also a bet against America.
As a further consequence, fracking will cause greater damage to the US financial system.
Fracking is largely based on external financing (funds etc.)
This will also have a negative impact on the American financial system.
And Trump is now likely to become even more hectic „to deal with actionism, lies and drama“.
It will be ugly by November.
Trump is still trying to show that he has everything under control and only the states make the mistakes.
And he twists a lot so that his view of things is the right one.
Trump and Fox News claim that the number of deaths is much higher in Germany and that only inpatient cases in the hospital are counted that only die on Covid-19.
Trump probably confuses this regionally and is also lying.
The count is complete in Germany. In the UK, the dead are left out in nursing homes.
Not in Germany. Otherwise the counting is identical in the EU.
If Trump realizes he’s a loser, he gets angry. And that can be dangerous !!!