FxPro: One more Trump’s campaign to raise the market’s cap?

Oil has lost 2.5% in the last two hours, after Trump’s next attempt to push it lower. On Twitter, he wrote that the “oil prices getting too high”.

This is bad news for both Brent and WTI, because at the end of last year such verbal intervention intensified pressure on the commodity prices, becoming the probable reason of more restrained rhetoric on the part of Saudi Arabia regarding the quotas for oil production within OPEC.

At the same time, that is good news for markets, due to cheaper oil is able to fuel economic growth, as it was in 2017, when the world economy was experiencing a rare, according to IMF, the period of synchronized growth partly as a consequence of oil quotations in more than half from 2014 to 2016.

Not least, that was the second pro-market news from Trump in the last 48 hours. This weekend, Trump said he would postpone the deadline for a deal with China from March 1st to a later date, which caused a 6% rally on Chinese bourses. Since the beginning of the day, futures on S&P500 has strengthened by 0.5%, increasing growth after the U.S. president’s pro-market position.

In the longer term, it is worth paying attention that Trump’s intervention in the oil market may not quite finished. Apparently, Saudi Arabia does not want to quarrel with the American president, having given up at the end of last year to pressure from his side.

Alexander Kuptsikevich, the FxPro analyst