Cheap Oil Is Double-Edged Sword for Trump

Group 1 - The oil industry is facing pressure from low oil prices, exacerbated by the prospect of cheap Venezuelan crude, which benefits Big Oil but harms consumers [1] - Oil market forecasters predict that Brent crude prices will average below $60 and West Texas Intermediate may fall closer to $50 or even lower throughout the year [2] - Low oil prices are expected to prompt a production response from non-OPEC countries, particularly the U.S., where shale drillers may reduce output due to financial constraints at $50 or less per barrel [3] Group 2 - Independent oil companies are at greater risk from low oil prices compared to Big Oil, which can endure lower prices for longer periods [4] - The decline in oil prices has led to reduced capital expenditure on exploration and production, with expectations of further declines in North America and Europe, while spending in Latin America, the Middle East, and Africa is projected to increase [5] - The bearish outlook for oil is driven by estimates of oversupply, with record amounts of oil on water and a significant gap between China's oil processing rates and imports, leading to expectations that supply will exceed demand [6]