Russia Is All The Rage

For oil and the markets, Russia is all the rage. There is the big OPEC/non-OPEC pow-wow in Russia and reports that Special Prosecutor Robert Mueller is opening an investigation into President Donald Trump’s business transactions with Russia one day after the President said that that would be a red-line for him. Of course Robert Mueller had no choice. If there is someone who has the job to look for a loaded gun and you tell him not to look for it in the closet, that’s going to be the first place he will look.

The report of the widening of the Russia probe did move markets. The dollar took it as a negative, falling to lows. That helped gold and silver break above resistance but for oil it was taken as a negative. More Russian drama does not help the pro-growth/pro-infrastructure spending. Is the Trump agenda leading to worries that a bogged down Trump presidency may hurt oil demand expectations.

This comes on the same day that the U.S. Treasury Department slapped a $2 million fine on Exxon Mobil Corp. for violating sanctions on Russia when Secretary of State Rex Tillerson was the CEO. Exxon was outraged and industry observers wonder if the fine was done for political reasons just to get back at Donald Trump. The Treasury said Exxon violated U.S. sanctions on Russia imposed by then President Obama when they signed eight documents relating to oil and gas back in 2014 with Igor Sechin, the president of Russian state-oil firm Rosneft who was a target of sanctions. Reports say that a spokesman for Exxon called the fine “outrageous” and said Treasury’s findings are a complete 180-degree turn from previous guidance handed down by the Obama administration at the time the sanctions were enacted. “ExxonMobil followed the clear guidance from the White House and Treasury Department when its representatives signed documents involving ongoing oil and gas activities in Russia with Rosneft — a non-blocked entity — that were countersigned on behalf of Rosneft by CEO Igor Sechin in his official representative capacity.” The timing of the fine seems to suggest that the so-called “swamp” is pulling out all the stops to fine or investigate anything Russian.