Trump To OPEC: 'Reduce Pricing Now!'

Trump To OPEC: 'Reduce Pricing Now!'

Speaking to the Wall Street Journal, Michael Cohen, Head of Energy Commodities Research at Barclays, said the market was now "caught between two forces".

On June 30, Trump said Saudi Arabia had pledged to increase its oil output by two million barrels per day "to compensate for falling output in Venezuela and Iran", Xinhua news agency reported. 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.

Trump's tweet on Wednesday came just a couple of days before OPEC meets in Vienna, and less than a week after the oil producer's cartel agreed to increase output by as much as 600,000 to 800,000 barrels a day to the market.

OPEC together with a group of non-OPEC producers led by Russian Federation started to withhold output in 2017 to prop up prices.

However, oil prices have shot up and Trump, anxious about the impact on United States voters ahead of November midterm elections, is appealing to the Saudis for help.

Because many OPEC countries are facing domestic troubles, the general expectation is that Iran, which is the fifth largest crude oil exporter, has a larger and increasingly discernible impact on how fuel prices behave in coming months. "Looming U.S. sanctions on Iran, however, are causing serious concerns amongst market players".

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"It will increases the prices of oil in the global markets; at the end it is the American consumer who will pay the price for Mr. Trump's policy".

Brent crude futures were at $77.70 per barrel at 0653 GMT, down 54 cents, or 0.7 percent, from their last close.

While Saudi Arabia is facing mounting pressure from Trump to do more, America's oil sanctions on Iran and trade frictions with China are adding to uncertainties as the planned United States tariffs on Chinese goods are set to start on Friday.

"The responsibility of paying unnecessary prices for oil by all consumers of the whole world, especially in US gas stations, is exclusively upon [Trump's] shoulders and the price of over $100 per barrel is yet to come".

Tehran blames rising prices on U.S. sanctions imposed on Iran and Venezuela, founding members of the cartel. This must be a two-way street.

USA crude inventories probably declined by 5 million barrels last week, according to a Bloomberg survey.

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Meanwhile, the market continued to watch rising US crude output, with this week's oil drilling rig count data, an indicator of future production, due at 1 p.m.

Trump has urged major buyers of Iranian oil to halt imports by his deadline of 4 November.

Iran has threatened to block oil exports through a key Gulf waterway in retaliation against any hostile USA action.

A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Persian Gulf, Iran ib July 25, 2005.

Analysis from Swiss investment bank UBS said spare capacity, the amount of extra oil a producer could put on the market in short order, was approachinga 10-year low.

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