President Donald Trump touted falling crude oil prices as millions of Americans hit the road ahead of Thanksgiving.
“Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82,” Trump tweeted Wednesday morning. “Thank you to Saudi Arabia, but let’s go lower!”
Oil prices getting lower. Great! Like a big Tax Cut for America and the World. Enjoy! $54, was just $82. Thank you to Saudi Arabia, but let’s go lower!
— Donald J. Trump (@realDonaldTrump) November 21, 2018
Falling oil prices are a good thing for American consumers, especially during the holidays, because it means falling prices at the pump.
The American Automobile Association (AAA) put low gas prices on the list of “things for which to be thankful” for this holiday. According to the group, 49 million Americans will drive to their Thanksgiving celebrations this year, and the average price of a gallon of gas is about the same as in 2017.
The national average price of gasoline is $2.61, according to AAA, which is about eight cents higher than 2017’s average for this time. (RELATED: Trump To Expand Drilling On Alaskan Lands Put Under Lock And Key By Obama)
Crude oil prices on the world’s most prominent benchmarks fell more than $20 per barrel from October highs. The West Texas Intermediate crude price hovers around $55 per barrel and Brent price is below $65 per barrel.
A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran, July 25, 2005. REUTERS/Raheb Homavandi.
Crude prices plummeted from their four-year highs of $86 per barrel in early October. Analysts attribute much of the fall in crude prices to the Trump administration’s granting of sanction waivers to eight countries, allowing them to continue buying Iranian crude.
OilPrice.com’s David Messler said the waivers “essentially made [sanctions] null in the eyes of crude traders, and they couldn’t get out of their long positions fast enough.”
Interest rate increases, slowing Chinese demand and Saudi and Russian agreements to pump more crude in the face of Iranian sanctions also factor into the oil price fall, analysts say.
Saudi Arabia and Russia quietly agreed in September to boost oil output. The move came after Trump blamed OPEC for keeping oil prices high and called on them to reduce prices ahead of the election.
In an exclusive October report, Reuters quoted a source familiar with the decision who said,” The Russians and the Saudis agreed to add barrels to the market quietly with a view not to look like they are acting on Trump’s order to pump more.”
At the same time, U.S. oil production has broken records over the past year. A boom in hydraulic fracturing and horizontal drilling propelled the U.S. to the top spot among oil-producing countries this year, surpassing both Russia and Saudi Arabia in September.
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