This week Crude Oil Inventories, out on Wednesday 10th January at 3.30pm GMT, is likely to see another drop but what that does to USD remains to be seen.
In 2017 OPEC worked hard to manipulate the price of oil by agreeing to reduce production levels and other like-minded oil producers, like Russia, promised to join them. Stock levels were high and prices were low leading to news last week that 11 Saudi princes were arrested for demonstrating against their new utility bills. Life is so hard as a modern Middle East prince.
There are mixed views on whether oil production overall will rise this year. To ensure its arms sales to the Middle East go smoothly, Russia is unlikely to renege on its deal with OPEC. Other oil-producing countries face war, poor infrastructure and natural declines in production leading some to declare supplies will decrease and prices will rise.
On the other hand, US shale production is increasing and boosting US oil inventories. Trump’s America First policy means it will push forward with production and could keep prices low. This would be good news for domestic gas guzzlers and manufacturers in the heartland of Trump’s power base. In an election year, he is sure to have this in mind.