Adviser to trump urged Russia and OPEC to limit oil production

Billionaire Harold Hamm, who is the chief adviser to Republican presidential candidate Donald trump, said that the cartel and Russia should agree to freeze production when their representatives will meet this month to discuss measures to stabilize, the Financial Times reports.

The businessman also said that us companies have already reduced production levels during the two-year price war that has upended the energy industry, the newspaper writes.

“I think it’s time for them to come to an agreement. American producers have cut production, we have done their job. So in the end it is reasonable to perform the freezing of production,” said Hamm FT at the Asia Pacific petroleum conference in Singapore.

Hamm is the founder and CEO of Continental Resources, a leader in the production of shale oil. According to Forbes, with a personal fortune of $14.5 billion

From late 2014 to early 2016 as a result of falling oil prices, shares of Continental Resources have fallen by 80% and as Hamm declined by $9 billion After a recovery in oil prices to $50/bbl. this year shares of Continental Resources rose more than 250%.

The FT notes that Hamm is likely to become Minister of energy of the USA if trump wins the presidential election.

A former adviser to President Barack Obama on energy Jason Bordoff, who now heads the Center for the study of global energy policy at Columbia University, said that the growth in US production will mean that the fall in oil prices to a lesser extent help the American economy. However, in his opinion, unwise to call the leading exporters of oil to the manipulation of the market and support prices in the future may have for US negative consequences.

Oil production in the U.S. decreased by approximately 10% from recent high of 9.6 million barrels./day made in April 2015. According to the us Department of energy, the pace of decline slowed, and on Wednesday, the Agency downgraded the forecast decline of production level for 2017 to 260 thousand Barr./day with 420 thousand Barr./day.

The publication explains that while low oil prices have long been considered a boon for consumers, but they have had a negative impact on the economy of oil producing States Texas and North Dakota. The result was also delayed plans for the abandonment of oil imports, as the decline in production of American drivers have come to prefer gas-guzzling cars.

At the same time, U.S. oil companies took steps to reduce costs and began to return to profitability at prices of $50/barrel. that cause anxiety in the OPEC countries, the FT notes.

On Monday, Russia and Saudi Arabia, which are major exporters of oil, signed an agreement on joint action to stabilize the oil market. In late September, OPEC members will meet with Russian representatives in Algeria to discuss a possible freeze of production.