Oil traders must become especially attentive to Donald Trump's Twitter feed over the coming weeks, an analyst said Monday, following the president's abrupt decision to lash out at the world's largest oil-producing nations.
In a tweet sent during a key meeting between Saudi-led oil producers and Russia on Friday, Trump criticized OPEC for "artificially" propping up prices. He also warned the oil cartel that its actions were "no good" and "would not be accepted" by the White House.
"He clearly puts the blame on OPEC and rushed to assure the American people that the situation will not be tolerated," Tamas Varga, analyst at PVM Oil Associates, said in a research note on Monday.
"Whether his view will have a long-lasting impact on prices remains to be seen, but it is now a daily routine for oil and financial traders to start their day by rigorously checking Donald Trump's tweets."
'Markets should determine price'
Oil prices have been surging higher in recent months, hitting their highest levels since late 2014 on Thursday. Alongside Russia and other allied partners, Saudi Arabia has led an effort to curb production in a bid to try to lift crude futures.
Trump's unexpected outburst prompted both oil benchmarks — U.S. West Texas Intermediate (WTI) and globally traded Brent — to fall around 1 percent.
Some of the world's biggest crude producers reaffirmed their commitment to imposed supply controls at a meeting in Jeddah, Saudi Arabia last week. The decision came amid reports Riyadh would be happy to see oil prices surge as high as $100 a barrel in order to boost the eventual initial public offering of its state oil company, Saudi Aramco.
When asked to comment on Trump's tweet attacking the cartel on Friday, Saudi Arabian Energy Minister Khalid al-Falih told CNBC: "Markets should determine price."
Social media first
A relentless rise in the production of oil from U.S. shale fields at the start of the decade dramatically increased global oil supplies. However, by the start of 2016, prices had collapsed below $30 a barrel. In response, OPEC kingpin Saudi Arabia and non-OPEC member Russia spearheaded an international effort to try and clear a global supply overhang in the hope of supporting prices.
The output controls have widely been viewed as a success, with Brent crude futures rebounding to reach multi-year highs of almost $75 a barrel on Thursday.
The recent uptick in oil prices comes at a time when Trump is eagerly looking to reassert his country's authority on the global stage. The Trump administration has slapped charges on metals imports, called on Mexico and Canada to help modernize the North American Free Trade Agreement (NAFTA) and announced Washington's withdrawal from the Trans-Pacific Partnership Agreement (TPPA).
All of these policies were first announced by Trump on social media.