Trump slams OPEC urging oil cartel to "get prices down now"

Fredrick Soto
September 24, 2018

On Tuesday, the global oil benchmark rose 1.3 per cent on a media report that Saudi Arabia, the world's largest oil exporter, was comfortable with prices above $80, indicating the producer would not try to increase output to drive prices lower.

United States crude oil stockpiles fell for a fifth straight week to three and a half year lows in the week to September 14, while gasoline inventories also showed a larger-than-expected draw on unseasonably strong demand, the Energy Information Administration said on Wednesday.

Reuters reported two weeks ago that Saudi Arabia wanted oil to stay between $70 and $80 a barrel for now, as it sought a balance between maximizing revenue and keeping a lid on prices until us congressional elections.

The Organization of the Petroleum Exporting Countries and other producers including Russian Federation meet on September 23 in Algeria to discuss how to allocate supply increases within their quota framework to offset the loss of Iranian supply.

US President Donald Trump took to Twitter on Thursday in an effort to persuade OPEC to increase production and ease prices. On Wednesday, WTI climbed back above $70 a barrel. "We will remember", Trump tweeted.

"The last thing that he is going to want to have happen is diesel prices and oil prices hitting highs when people are going to the voting booth", Zahir said.

Prices were supported by sanctions on Iranian supplies and pressured by the potential that Chinese demand could wane.

Trump has imposed sanctions in response to Iran's nuclear program that are to go into full effect on November 4.

Trump has consistently complained that oil prices are too high, following a significant uptick in prices that has been passed on at the pump to United States drivers.

USA crude oil stockpiles fell for a fifth straight week to 3-1/2-year lows, while gasoline inventories also drew down sharply last week on unseasonally strong demand, the Energy Information Administration said on Wednesday.

Many buyers have already cut Iranian purchases ahead of the new regulations.

Despite the president's intervention, market sentiment remained fairly bullish with many traders and analysts expecting Brent to move above $80 soon. "The producers that count are producing at will" and Saudi Arabia and Russian Federation are likely to boost output further, he said.

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