The recent drop in crude oil (CL=F, BZ=F) prices raises concerns about its impact on global markets. Factors such as President Trump’s tariff announcements and expected OPEC supply increases have contributed to the decline.
Hedgeye Risk Management energy analyst Fernando Valle joins Catalysts to discuss oil prices against the backdrop of policies from the Trump administration and market volatility.
Valle says that “without a question,” the “OPEC+ increase in supply” is primarily driving the drop in crude prices and oil across the board.
Valle also highlights the impact of the supply boost. “We’re still not in a super tight oil market, so bringing in as much as 2.2 million barrels a day, which is just over 2% of global supply, back into a market that’s not very tight is almost certain to bring prices down,” he explains.
Valle also points out how US energy policies are shaping oil price expectations.
“I know from our sources in the administration that they want oil to go as far down as $50, whether that be Brent or WTI, to help with inflation significantly,” Valle adds.
To watch more expert insights and analysis on the latest market action, check out more Catalysts here: https://finance.yahoo.com/videos/series/catalysts/
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