Oil mixed as investors short-cover and Saudi boosts output

Posted July 09, 2018

"The OPEC Monopoly must remember that gas prices are up & they are doing little to help", Trump tweeted. President Trump has also been busy tweeting his irritation at OPEC, saying the cartel is not doing enough to keep oil prices in check.

On Wednesday, the USA president again accused the OPEC of driving fuel prices higher and urged U.S. allies such as Saudi Arabia to pump more. "This must be a two way street, REDUCE PRICING NOW!"

In addition to reducing the price of its August barrels, Saudi Arabia also told the Organization of the Petroleum Exporting Countries (OPEC) that it increased production by nearly 500,000 barrels per day last month.

"The surprise build in total crude stocks gave market observers pause amid a slew of other factors influencing the oil market, including increasing geopolitical factors - in Iran, Libya, and Venezuela - potentially destabilizing global supply and high crude exports from the U.S.", AAA said in a statement.

Speaking yesterday in reaction to President Trump's series of tweets about OPEC's fuel prices, the Iranian official accused the U.S president of driving oil prices up with his tweets.

In his bid to halt the flow of Iranian oil without raising prices, Trump has urged Saudi Arabia and other OPEC members to increase their output.

Crude oil prices in recent days have hit their highest levels since late 2014.

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Trump's pressure on OPEC comes just as key oil exporters were boosting output, which has been curtailed since 2016 to boost prices. -Chinese trade war and increased production by Saudi Arabia and Russian Federation outweighed concerns over supply disruptions from Venezuela to Libya to looming sanctions on Iran.

At the time, Trump tweeted that he spoke with Saudi Arabia's King Salman to ramp up oil production to lower prices.

Brent crude LCOc1, the global benchmark, was down 83 cents at $76.56 a barrel by 1403 GMT.

Iran's petroleum minister said that "political issues should not interfere in the crude market, and supply and demand should determine the final oil price".

Tehran blames rising prices on USA sanctions imposed on Iran and Venezuela, founding members of the cartel. International Brent crude slipped below $77 on world markets.

Even if the USA government grants some waivers to allies, FGE estimated 1.7 to 2 million bpd of crude and condensate would be cut out of markets once its sanctions are implemented. You are hammering on good guys in OPEC. "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". While the comments were ambiguous, Iranian officials in the past have threatened to block the Strait of Hormuz, a major oil shipping route, in retaliation for any hostile USA action.