U.S. President Donald Trump again accused the Organization of the Petroleum Exporting Countries of driving gasoline prices higher on Wednesday and urged the oil producer group to do more. On the US's official day of independence (July 4), the President repeated a threat that OPEC nations should lower their oil prices in return for the security support they receive from the US. "This must be a two way street, REDUCE PRICING NOW!"
The world's biggest crude exporter is preparing to ramp up oil production, possibly by as much as two million barrels per day, amid United States sanctions on Iran. However, summer months in the USA usually lead to increased demand for oil, boosting the price of gasoline in a midterm election year.
Opec together with a group of non-OPEC producers led by Russian Federation started to withhold output in 2017 to prop up the market.
Saudi Arabian Oil Co., also known as Aramco, lowered August prices for light oil to Asia by 20 cents to $1.90 a barrel above the Middle East benchmark, according to Bloomberg.
Iran in the past has said some OPEC members are tools of the Trump administration.
Energy consultancy FGE on Friday issued a stark warning of looming supply shortages due to US sanctions against Iran, and because of disruptions elsewhere.
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Kazempour Ardebili also emphasized that the USA president was wrong to believe that Saudi Arabia and Russian Federation would help reduce oil prices, adding that both key global producers had little vested interest in bringing down the prices.
Oil was mixed on Thursday, with United States crude slipping and Brent futures little changed after data showed an unexpected build in U.S. crude oil stockpiles. The outage at the 360,000 barrels per day (bpd) Syncrude facility in Canada has contributed to a sharp reduction in the discount for USA crude versus Brent crude over the past month. "Since when did you start ordering OPEC", he said, according to Shana.
USA crude was bullish after official data on Thursday showed inventories at Cushing, the delivery point for US crude futures, fell to their lowest in 3-1/2 years.
Iran has threatened to block oil exports through a key Gulf waterway in retaliation against any hostile U.S. action.
China says it will retaliate, and U.S. President Trump said on Thursday he may ultimately impose tariffs on more than a half-trillion dollars worth of Chinese goods.
The U.S. Navy stands ready to ensure freedom of navigation and free flow of commerce, a spokesman for the U.S. military's Central Command said. "Because the oil market is already in tight supply due to the numerous outages, this would drive worldwide prices (Brent) further up", Commerzbank said in a note. "It looks as though any additional supply increase from Gulf producers and Russian Federation will not be able to replace lost barrels from Libya, Iran and Venezuela".