On Twitter this week, the President said that “Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!”

President Trump would love to see oil prices drop even lower than they are today. Oil stabilized on Wednesday after suffering its longest losing streak in recent history. Some investors are concerned about falling prices, and stock market woes this week have reflected that. However, President Trump has a different take on the situation, and would actually be happy if prices were to slide even more.

OPEC, the Organization of the Petroleum Exporting Countries, has now responded to the President, warning him that lower prices would be dangerous for America.

OPEC Leader Uses History as a Warning

Mohammad Barkindo, the Secretary General of OPEC, said this week that OPEC producers would reduce output to stop prices from falling further. Barkindo and the organization he represents will “do whatever it takes to sustain the stability that we have achieved.” The largest oil producers want to maintain prices because they believe they are better for global stability.

Barkindo pointed to events in recent history, such as the oil crash of 2014 – 2016 that led to bankruptcies for American energy companies. One prominent example was SandRidge, which collapsed under more than $4 billion of debt in 2016.

It is estimated that there was a total of 195,000 American jobs lost during the entire oil crash.

While job losses and company closures are a real risk during severe oil price crashes, there are benefits in other areas of the economy. Transportation and consumer goods typically become more affordable when barrel prices decline. Fuel at the pump can also become more affordable, offering a significant advantage to American households.

OPEC Still Pushing to Reduce Production

Oversupply is the biggest problem leading to instability today. The United States has significantly increased oil production capabilities in recent months. American producers are now outputting more than 11 million barrels per day, making the nation the largest single producer of crude oil, a position which it hasn’t held since 1973.

Oil prices aren’t yet at lows that would threaten the industry or its largest players. However, record slides like those seen this week are still worrying signs. Is the President right to call for even lower prices, or, should major global producers work together to maintain a market that is healthy for corporations, consumers, and investors?

President Trump will be sure to weigh in on the situation again, particularly if prices change suddenly and rapidly at any point within the next two months.