The U.S. President Donald Trump hailed low gasoline prices in the U.S. on Tuesday and said he forecasts even lower prices for 2019.
"Gas prices are low and expected to go down this year. This would be good!" Trump wrote on social media.
The president took credit for low gasoline prices in his second statement an hour later on Twitter by writing "Do you think it’s just luck that gas prices are so low, and falling? Low gas prices are like another Tax Cut!"
In December 2017, in order to boost economic growth, the Trump administration lowered the corporate tax rate in the U.S. by cutting it down to 21 percent from 35 percent.
This tax cut helped propel the American economy to a growth rate of 3.4 percent in the third quarter of 2018. The economy expanded by 4.2 percent in the second quarter of last year -- the highest since the third quarter of 2014.
The U.S. stock market in 2018, however, saw its worst performance in a decade, mostly due to rising trade tensions between the U.S. and other countries and with lower economic growth forecasts for 2019.
The S&P 500 and the Dow Jones Indexes in the New York Stock Exchange ended 2018 with a decline of 6.2 percent and 5.6 percent, respectively -- their biggest annual losses since 2008. The Nasdaq lost 3.9 percent in 2018 to record its worst year in a decade.
Trump has long blamed OPEC for high crude oil prices on numerous occasions, and thanked Saudi Arabia on Nov. 21 for keeping prices low as he wrote on Twitter: "let’s go lower!"
During the previous week, Trump wrote on social media: "Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!"
Although Saudi-led OPEC and its allies, including Russia, agreed on Dec. 7 to curb their total production by 1.2 million barrels per day, crude prices continued falling in December.
Right after OPEC's decision, the price of international benchmark Brent crude rose to $63.73 per barrel, but on Dec. 28 declined to $53.80. American benchmark West Texas Intermediate decreased from $54.22 a barrel to $46.22 per barrel over the same period.
Around 15 percent of the decline in crude prices helped a fall in gasoline prices in the U.S. During this period, the average retail gasoline price in the U.S. fell from $2.54 per gallon (3.78 liters) to $2.36 per gallon -- a 7.1 percent decline, according to data compiled by Anadolu Agency based on information from the U.S.' Energy Information Administration (EIA).
With U.S. crude oil production expected to increase, crude prices could fall further in 2019, but not all of the declines in the U.S.' gasoline prices are attributable to rising oil supply.
Seasonally, gasoline prices are at their lowest level during winter in the U.S., but prices rise in spring and peak over the summer with the escalation in domestic transportation.
Low oil prices, on the other hand, have a negative impact on the American oil industry as it lowers profit margins of producers and negatively impacts future investments.
The global oil market will largely focus during the first half of 2019 on how OPEC and Russia's supply cut will affect oil prices, and on the extent to which U.S. crude oil production will rise.
OPEC and its allies will meet in April to discuss overall oil market conditions, which could result in a decision to make another supply cut by mid-2019 if crude prices continue to fall.
By Ovunc Kutlu