American fingerprints are all over oil’s record losing streak that’s plunged prices into a bear market. The State Department’s zigzag on Iran sanctions, President Donald Trump’s tweets about Opec supply, the demand-sapping trade war with China and the explosion of shale oil production are all key factors leading to the collapse in crude prices since early October, Ed Morse, head of commodities research at Citigroup Inc., said in a phone interview.
“The oversupply in the market is a made-in-America phenomenon,” Morse said. “It’s the unexpected consequences of Am-erican policy and the unintended impact of technological chang-es that made this historically unpreceden- ted arena for production growth blossom.”
Morse was among several commodity traders and experts who less than two months ago said global benchmark Brent crude could spike above $100 a barrel if the US followed through with its threat to use sanctions to drive Iranian oil exports to zero. The fear of a supply crunch helped drive the marker to as high as $86.74 a barrel in early
October, the highest level since 2014.
Then the Trump administration changed its mind, granting waivers that allowed eight countries to continue purchasing limited amounts of Iranian oil. Brent traded at $65.91 at 12:10 pm Singapore time. West Texas Intermediate, the US benchmark, was at $56 a barrel, following a record 12 session slide through November 13.