President Trump’s efforts to lower energy prices are impacting the oil market, leading brokers to cut price targets and investors to withdraw funds. Brent crude is trading near $70 a barrel, and West Texas Intermediate has fallen below $67, after seven weeks of selling. Westpac and Citi predict a $60-$65 range, while JPMorgan suggests prices could drop into the $50s. Fund managers have reduced their gross long positions in WTI to the lowest levels since 2010, according to data from the US Commodity Futures Trading Commission.
Trump’s trade agenda, combined with OPEC’s unexpected supply increase, has fueled the sell-off. China’s directive for refiners to lower fuel production has also raised concerns about long-term demand. Katana Asset Management has reduced exposure to ASX-listed oil producers, citing an unfavorable outlook. Geopolitical developments, including Trump’s pledge to pressure Saudi Arabia to lower oil costs, further complicate the situation. Perennial resources fund manager Sam Berridge is underweight the sector due to concerns about global growth and oil demand. Citi strategists noted that Trump aims to use all available tools to deliver lower energy prices, potentially delivering a significant deflationary impulse to the US economy. Morgan Stanley has also cut its Brent forecast by $5 to an average of $70 a barrel this year.
