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OPEC has urged its members not to discuss oil prices publicly. That directive coming at the advice of its lawyers, Reuters has learned, who fear the oil producing group could be sued by the US government for manipulating prices. Given President Trump's persistent criticism of the group and demands it bring oil prices down.
Reuters energy editor Dmitry Zhdannikov.>> For decades, OPEC has been predominantly avoiding talking about the oil prices but there have been moments when they were giving clear signals, such as the fair oil price should be about $80 per barrel, or $70 per barrel, something that will justify investments.
Now clearly with the warning from their lawyers says
] from sources, lawyers from White & Case, they will stop talking about the oil prices all together. There is still opportunities to send various signals to the market, such as we believe supply is short, meaning they might be ending supply.
Or we believe demand is weak meaning they will have to withhold some supply. But clearly they are quite concerned about this recommendation from their legal teams.>> Those legal teams fear that any talk of prices could trigger proposed legislation known as NOPEC or No Oil Producing or Exporting Cartels Act which could open OPEC up to anti-trust lawsuits.
NOPEC has long lain dormant with previous presidents signalling that they would veto any move to make it law. But Trump has taken an aggressive stance on oil, urging OPEC to increase output to relieve pressure on a market hovering around four-year highs.>> What's very important is that Trump and the Trump administration knows very well they have to wait for a few years, for a few more years before the US production rises further.
And at some point, the US will become almost completely self sufficient in oil and as it is already self sufficient in gas. Basically, it's a game which will allow the Unites States to survive the high oil price environment until it becomes totally self-sufficient by increasing its oil output.
>> If NOPEC becomes law, it would revoke the sovereign immunity currently enjoyed by oil producing nations, potentially allowing the US to confiscate their assets. For a country like Saudi Arabia, OPEC's unofficial leader, there's a lot at stake. The kingdom has about $1 trillion worth of assets invested in the US.