Oil Prices Waver After Bolton Sacked
Few individuals have the ability to move the market like John Bolton, the U.S. National Security Advisor who was fired yesterday by President Donald Trump. Bolton’s name hasn’t made headlines in the financial news much during his tenure, but his sudden firing, coupled with his hawkish views on Iran, send oil markets into a tailspin, at least temporarily. U.S. WTI prices fell by as much as 2.2 percent late Tuesday, to $57.30 per barrel, after Trump announced Bolton’s firing via twitter. Though no specific reason was giving for Bolton’s firing, it is no surprise that he’s been at odds with Secretary of State Mike Pompeo, and that President Trump has often disagreed with Bolton’s stance on key issues.
Bolton has long been in a tight conflict with Iran, supporting the strongest possible pressure on the rogue nation and helping President Trump implement tough sanctions on Iran that have caused the country’s oil production levels to crash. Data has indicated that Iranian oil production has been cut by nearly 2 million barrels per day since mid-2018. With Bolton’s ousting, analysts believe that the tensions between the U.S. and Iran will be eased, reducing the fear of a war between the nations that has been simmering for some time, and perhaps enabling Iran to return to its former production levels.
Also pressuring oil prices on Tuesday was data out from the U.S. Energy Information Administration which cut its outlook for oil demand due to its concerns about the state of the U.S. economy. The EIA now forecasts that demand will be 900,000 barrels per day in 2019, the weakest growth since 2011.
Despite Tuesday’s volatility, oil futures bounced back during Wednesday morning’s Asian session, with U.S. WTI futures up 0.82 percent to $57.87 per barrel, and Brent crude futures up 0.79 percent to $62.87 per barrel.
Bolton’s dismissal is just the latest in a long line of firings by President Trump, though it had more instant market impact than most other dismissals. Those axed thus far including dozens of high-ranking members of the Trump administration, including Reince Priebus and John Kelly, both of whom served as Trump’s Chief of Staff, Michael Flynn and H.R. McMaster, both of whom also served as National Security Advisor.