Crude oil bounced back on Tuesday, as markets recalibrated following a steep selloff on Monday that was triggered by President Trump’s criticism of OPEC’s production policy.
Crude Markets Stabilize
The U.S. and global crude benchmarks bounced off weekly lows in overnight trading. The West Texas Intermediate (WTI) benchmark for U.S. crude futures climbed 22 cents, or 0.4% to $55.70 a barrel on the New York Mercantile Exchange. ICE Brent futures rallied 43 cents, or 0.7%, to $65.19 a barrel.
Commodity markets were also bolstered by a weaker dollar. The U.S. dollar index (DXY), a broad performance measure of the greenback against a basket of six rivals, slipped 0.1% to 96.33.
Oil plunged 3% on Monday after President Donald Trump criticized the Organization of the Petroleum Exporting Countries (OPEC) for manipulating prices.
“Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!” the president tweeted Monday.
Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike – fragile!
— Donald J. Trump (@realDonaldTrump) February 25, 2019
OPEC agreed in December to slash output levels by a significant margin to rebalance the market. Earlier this month, Saudi Arabia’s energy minister announced the kingdom was planning far more drastic cuts beginning in March. The cartel has so far removed 797,000 barrels per day from the market. That number is expected to increase once the Saudis implement their latest cut. For more on that story, read: Oil Prices Recover as Saudi Arabia Takes Drastic Measures to Rebalance Market.
Goldman Sachs: 2019 Be a Wild Year for Oil
Crude prices could be heading sharply higher in the coming months thanks to a combination of technical and fundamental factors,