Oil Special: Bank Gets Uber-Bearish (Between 11% and 27% Lower Forecast)
Trump wants, needs, and will persist in his drive for lower energy prices
Everything we’ve been saying (channeling Bessent) about Trump needing and wanting lower Oil and a weaker dollar was just echoed and published by a major player in Oil. Here’s just a sample.
■ Trump wants, needs, and is likely to persist in using all tools at his disposal to deliver lower energy prices. Indeed, the cost of living, interest rates, and govt debt service burdens are very high in the US, and tariffs may raise inflationary pressures.
■ Lower cost oil producing countries in OPEC+ may wish to raise output as opposed to concede market share to tax cut fuelled US shale (the higher cost producer)
To say we agree with their conclusions about what Trump wants/needs is an understatement.
To say it will actually happen..that’s something else entirely. But the bank suggests to their producer clients to start acting as if it will happen.
Bottom line is: Trump needs weaker oil, and a weaker USD. Everything else he is trying needs cooperation of others who will not like it.
Weaker oil does most of the heavy lifting for his plans geopolitically. A weaker dollar does much of the work domestically in combination with DOGE cuts. Everything else is an uphill battle.