Oil analysts say it’s a move that’s been working since last year.
“It worked so well in 2017 for [the Saudis]to cut flows to the U.S. because people could see the inventories dropping because U.S. data is so timely and transparent,” said Matt Smith, head of commodities research at ClipperData.
Despite the latest move, oil analysts posit that cutting shipments was simply a move to reduce oil glut while boosting prices rather than one strictly aimed at catching President Trump’s ire. Government data on Thursday revealed that U.S. crude stockpiles increased for an eighth consecutive week to 10.3 million barrels, causing the latest declines, but the move by the Saudis to reduce shipments to the U.S. can help pare down any excess inventory.
Of course, bears are lurking in the market so any trigger event that cuts prices further even after a short-term spike will be a boon to DRIP.
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