Iran to Trump: Your tweets are driving up oil prices

President Rouhani talks to Iranian expatriates in Bern Switzerland

President Rouhani talks to Iranian expatriates in Bern Switzerland

For the week, WTI futures lost about 0.5 percent after hitting a 3-1/2-year high on Tuesday, while Brent lost about 3 percent.

US President Donald Trump took to his Twitter handle to lambast the Organisation of the Petroleum Exporting Countries (OPEC), demanding them to do more to reduce oil prices 'NOW!'

In late morning trading Thursday, the price of the worldwide benchmark Brent grade of crude oil was little changed at $77.85 a barrel.

"The OPEC Monopoly must remember that gas prices are up & they are doing little to help. REDUCE PRICING NOW!" he added.

"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.

Despite ongoing geopolitical and diplomatic turmoil, OPEC and its new petro allies-led by Russia-emerged with an agreement to boost crude output by 1 million barrels per day (b/d) in the name of "market stability".

He said Trump had in fact made the USA a hostage to Russian Federation and Saudi Arabia as a result of his campaign to undermine Iran's oil exports, stressing that the United States president should have expected this when he moved to block Iran's access to global markets.

Earlier, Kazempour Ardebili had said that Trump's pressure on worldwide firms not to buy Iranian oil would drive prices higher and end up hurting the American economy. The Saudis have increased oil production, following an OPEC meeting last month, but it hasn't been enough to overcome the effects of reduced supplies from other producers.

Weighing on prices was a rise in U.S. crude inventories of 1.2 million barrels in the week to June 29, to 417.88 million barrels, the U.S. Energy Administration (EIA) said on Thursday.

Ardebili told Reuters that Trump "should have expected" when blocking Iran's access to the global markets that it would end up as "hostage (to) Saudi Arabia and Russian Federation", who he said had little vested interest in bringing down prices. Despite a positive nod from Saudi Arabia and Russian Federation for higher production, the backdrop of poor output from Libya and Canada prompted supply scarcity.

Iran's OPEC Governor Hossein Kazempour Ardebili on Thursday took a shot at President Trump's comments, saying, "Your tweets have increased the prices by at least $10". An Iranian Revolutionary Guards commander warned that Iran might blockade the narrow, strategic Strait of Hormuz if Trump stopped oil exports, a move some considered unlikely since Iran's own imports pass through the Strait. Further, rising trade war concerns in United States and China too dragged oil prices down, hitting a low of 76.60 levels as of 15:58 hours IST.

Trump's plan is to get the Gulf countries to commit to increase output by over two million barrels per day to offset falling supplies elsewhere.

While OPEC leader Saudi Arabia will pick up the slack, Morgan Stanley believes oil markets will be undersupplied by around 600,000 in the second half of 2018.

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