ISLAMABAD – US President Donald Trump gives a stern ultimatum to SaudiCrown Prince Mohammad Bin Salman.
President of the United States Donald Trump has given an ultimatum to SaudiCrown Prince Muhammad Bin Salman, either to cut oil or lose US militarysupport.
Media reports said that Donald Trump told Saudi Crown Prince that unlessthe Organization of the Petroleum Exporting Countries (OPEC) startedcutting oil production, he would be powerless to stop lawmakers frompassing legislation to withdraw U.S. troops from the kingdom.
The effort illustrated Trump’s strong desire to protect the U.S. oilindustry from a historic price meltdown as governments shut down economiesworldwide to fight the virus.
Earlier US Oil Priceslinkplungedbelow zero for the first time in history as demand for energy collapsesamid the global pandemic and traders sought to avoid owning crude withnowhere to store it.
It was nearly $60 at the start of the year, before business-shutdown ordersswept the world and idled factories, offices and automobiles.
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Much of the drop was chalked up to technical reasons — the May deliverycontract is close to expiring so its trading volume was light, which canexacerbate swings. But prices for deliveries even further into the future,which were seeing larger trading volumes, also plunged. Demand for oil hascollapsed so much that facilities for storing crude are nearly full.
Tanks could hit their limits within three weeks, according to ChrisMidgley, head of analytics at S&P Global Platts. And traders are willing topay someone else to take that oil for delivery in May and shift the burdenof figuring out where to keep it.
Benchmark U.S. crude oil for June delivery, which shows a more ”normal”price, fell 16.5% to $20.90 per barrel. Big oil producers have announcedcutbacks in production in hopes of better balancing supplies with demand,but many analysts say it’s not enough.
