Are gasoline prices in the U.S. really too high?

Oil prices chart new territory on supply-side concerns

Oil prices chart new territory on supply-side concerns

Trump tweeted Wednesday that the Organization of Petroleum Exporting Countries is "doing little to help" reduce United States gasoline costs and "if anything, they are driving prices higher". On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.24% at $74.32 a barrel. Three members of the Organization of Petroleum Exporting Countries - Libya, Iran and Venezuela - are posting real, or have expected, production declines.

"This must be a two way street", he wrote, adding in block capitals, "REDUCE PRICING NOW!"

OPEC and Russian Federation said in June they were willing to raise output to address concerns of supply shortages due to unplanned disruptions from Venezuela to Libya, and likely also to replace a potential fall in Iranian supplies due to US sanctions. Saudi Arabia agrees with Trump on the importance of keeping prices down but has not committed to increasing output sufficiently.

US light crude CLc1 settled up 20 cents at $74.14 a barrel, rebounding from a session low of $72.73 a barrel.

This is while world oil prices have climbed higher as the Trump administration has pressured USA allies to end all purchases of oil from Iran.

In addition to pressing Saudi Arabia to pump as much as 2mmb/d more to an unprecedented 12mmb/d, an amount many doubt the Saudi can maintain for an extended period of time - think Tesla making Model 3s - the Trump administration has also been pushing countries to cut all imports of Iranian oil from November when the USA re-imposes sanctions against Tehran, after Trump withdrew from a 2015 nuclear deal agreed between Iran and six major powers. It has made similar threats in the past, prior to the 2015 nuclear deal. Washington has since told countries they must stop buying Iranian oil from November 4 or face financial measures.

The UAE's Abu Dhabi National Oil Co (ADNOC) said on Tuesday it could increase production by several hundred thousand bpd if needed. "He has agreed", Trump tweeted on June 30.

Earlier this week, Kazempour was quoted by the same outlet commenting on the US push to remove Iranian oil from the market.

The Strait of Hormuz is of major strategic importance.

Iran's OPEC governor, Hossein Kazempour Ardebili, accused the United States and Saudi Arabia of trying to push up oil prices and said both countries are acting against the foundation of OPEC.

The war of words over oil prices continues between US President Donald Trump and Iran, and the latest salvo from Iran is for Trump to stop tweeting. "As a result, American consumers would have to pay the price of Trump's unilateralism at gas stations", he said.

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