Oil prices were down on Friday after newly inaugurated US President Donald Trump on Thursday drew a direct link between persistently high inflation and global oil prices during video remarks before the World Economic Forum in Davos, Switzerland.
Trump said he intends to address the problem by boosting domestic production and by asking “Saudi Arabia and Opec to bring down the cost of oil.”
“You got to bring it down, which, frankly, I’m surprised they didn’t do before the election,” the US president said. “That didn’t show a lot of love by them not doing it. I was a little surprised by that.”
Brent crude futures were down 50 cents at $77.95 a barrel by 0044 GMT on Friday, Reuters reported. US West Texas Intermediate crude shed 31 cents to $74.31.
Opec+, which includes Saudi Arabia, the UAE, Kuwait and nine other countries, extended ongoing output cuts by a few months at its latest meeting in December as it seeks to support prices that have remained below some members’ breakeven levels, including Saudi Arabia’s.
In his remarks, Trump also suggested that Saudi Arabia’s and Opec’s intervention in lowering prices would “immediately” put an end to the war between Russia and Ukraine.
“They should have done it long ago,”
he said. “They’re very responsible, actually, to a certain extent, for what’s taking place — millions of lives are being lost.”
Once prices fall, Trump said he will “demand that interest rates drop immediately.”
The US Federal Reserve’s Federal Open Market Committee (FOMC) is responsible for setting the federal funds rate range – which tends to drive interest rates across the world – based on market conditions and independent of political pressure from the White House.
Speaking to Davos’ typical audience of global bankers, government ministers and CEOs, Trump also cited press reports that Saudi Crown Prince Mohammed bin Salman pledged $600 billion of US investments in the next four years during a call the two leaders held Wednesday.
“But I’ll be asking the crown prince, who’s a fantastic guy, to round it out to around $1 trillion,” Trump said Thursday.
“I think they’ll do that because we’ve been very good to them.”
This week, Aramco’s chief executive Amin Nasser said he sees the oil market as healthy and expects an additional 1.3 million barrels per day of demand this year.
The state-backed oil company bought its first cargo of WTI Midland, a US crude oil grade that underpins the global Brent benchmark,
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