How Does Trump's Twitter Account Affect Oil Prices?
Jul 04 2018 Read 273 Times
From promoting brands to calling out shocking customer service, social media platforms like Twitter have serious sway when it comes to influencing consumers. Now, experts maintain that Donald Trump's notoriously brash social media habits have the power to affect oil prices, with analysts christening the trend the "Trump Twitter Effect."
It's no secret that the 45th President of the United States is a big fan of Twitter, using the platform to praise his allies and slam his enemies. In the wake of insults like "dummy dope", "clown", "low class slob" and "perv sleazebag", some social media experts have labelled Trump a cyber bully.
Trump vendetta sends Amazon shares plummeting
Amazon CEO Jeff Bezos is the latest individual to draw criticism from Trump, with the President accusing the company of undermining the US Postal Service and swindling the Treasury out of billions. The tweet caused Amazon.com Inc. (AMZN) shares to drop by 11%, a decline that was fuelled by traders bracing themselves for a tariff-fuelled trade war.
While crude prices are usually immune to domestic political controversy, experts warn that Trump's brash tweets have started to influence the oil price environment. Earlier this year, Trump's rant against OPEN trigged a micro-crash and caused US West Texas Intermediate (WTI) and globally traded Brent markets to fall by around 1%.
"Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!"
— Donald J. Trump (@realDonaldTrump) April 20, 2018
Checking Trump's Twitter account now a daily routine for traders
According to Tamas Varga, an analyst at PVM Oil Associates, the "Trump Twitter Effect" is so severe that many brokers now check the president's social media accounts before commencing trading.
"Whether his view will have a long-lasting impact on prices remains to be seen, but it is now a daily routine for oil and financial traders to start their day by rigorously checking Donald Trump's tweets," he explained in a recently published research note.
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