Trump taps strategic petroleum reserve tamping down oil prices, as the prices have surged on Thursday to the highest levels in over three years and the volume and number of supply outages carry on rising. The unexpected, significant shortage in the oil supply is in extreme rise.
As the midterm elections of the United States are nearing, the oil prices are highly rising by the day, which has resulted in the decision made by the US President Trump of tapping the strategic petroleum reserve (SPR) in order to tamp down the prices before the November voting.
Frontier markets equity research head, Hootan Yazhari from the Bank of America Merrill Lynch said in a statement, “We are in a very attractive oil price environment and our house view is that oil will hit $90 by the end of the second quarter of next year. We are moving into an environment where supply disruptions are visible all over the world… and of course President Trump has been pretty active in trying to isolate Iran and getting U.S. allies not to purchase oil from Iran.”
This surprising turnaround from May in the oil market has even shaken the market marinated in the uncertainty and volatility. However, the higher output hearsays from Russia and Saudi Arabia caused a strike in prices and also made speculation of a new lengthy downturn, in late May.
Standard Chartered PLC noted that, “Higher gasoline prices, particularly in the Midwest, are likely to provoke a SPR release in the run-up to November’s mid-term elections.”