Trump to Saudi Arabia: Lower Oil Prices or Else
- Author: Zachary Reyes Jul 09, 2018,
Jul 09, 2018, 0:30
Mr Trump on Wednesday accused the Organisation of Petroleum Exporting Countries (OPEC) of driving up fuel prices. S. defends many of their members for very little dollars.
Speaking to the Wall Street Journal, Michael Cohen, Head of Energy Commodities Research at Barclays, said the market was now "caught between two forces".
Weighing on prices was a rise in U.S. crude inventories of 1.2 million barrels in the week to June 29, to 417.88 million barrels, the U.S. Energy Administration (EIA) said on Thursday.
Oil was mixed on Friday as a Canadian supply outage supported US crude prices, while an increase in production from OPEC's biggest exporter Saudi Arabia pushed Brent lower.
U.S. West Texas Intermediate and worldwide benchmark Brent crude oil futures are trading lower early Thursday and for the week after President Trump turned up the heat on OPEC to reduce prices for crude. "Please stop this method", the oil ministry news agency quoted Kazempour Ardebili as saying.
US crude oil stockpiles unexpectedly rose last week, as imports grew and refineries cut output while gasoline inventories decreased almost double forecasts, the Energy Information Administration said on Thursday. Moreover, Obama was able to do this without increasing oil prices because a surge in US shale oil drilling more than offset lost Iranian exports. Brent crude futures were up 11c at $78.35 a barrel.
OPEC members in coordination with Russian Federation just reached an agreement to pump an additional 1 million barrels a day onto world markets.
Trump indirectly linked US foreign policy to his demand, saying the USA defends some oil producing countries "for very little" money. Trump said Sunday that OPEC should put another 2 million barrels on the market to make up for the coming shortfall in Iranian crude sales due to sanctions.
U.S. West Texas Intermediate (WTI) crude futures were at $74.60 a barrel at 0044 GMT, up 46 cents, or 0.6 percent, from their last settlement.
An executive from China's Dongming Petrochemical Group said he expected Beijing to soon impose the tariff on US oil imports.
This would already take it to record levels but Trump's suggestion of raising production to two million barrels per day would stretch Saudi Arabia to its absolute limit.
At 08:23 a.m. EDT today, WTI Crude was down 0.78 percent at $72.37, and Brent Crude traded down 1.23 percent at $76.44.
The reduction comes a day after Trump took aim at OPEC for rising oil prices, urging the cartel to "REDUCE PRICING NOW!"
Saudi Arabia also said it would reduce the official selling price of its August barrels.