Oil prices fall as Trump demands OPEC cut prices

VW cars being prepared for exported

VW cars being prepared for exported

Over the weekend, President Donald Trump tweeted that Saudi Arabia agreed to increase crude oil production by 2 million barrels per day (Mbd) to cool high oil prices and make up for supply shortfalls due to current outages in Venezuela and future supply losses in Iran.

The announcement comes after US President Donald Trump said on Saturday that King Salman had agreed to his request to ramp up oil production. The Kingdom did not initially confirm Trump's tweets and the White House at first backed away from the comments.

"In response to the President's assessment of a deficit in the oil market, King Salman affirmed that the Kingdom maintains a two million barrel per day spare capacity, which it will prudently use if and when necessary to ensure market balance", the statement said. "So, in terms of the USA, here, we've seen oil prices rise in the aftermath of the OPEC meeting".

Oil prices climbed down from their 3 ½ year high to reach US$73 per barrel, with Brent trading at US$76.96 Tuesday afternoon.

Overall, however, analysts said OPEC's production policy as well as unplanned supply disruptions were now the main price drivers.

Saudi Arabia, which has been pumping about 10 million barrels per day, holds the largest spare capacity in the world and is the only country that can add substantial supply to the market.

Traders in Asia are trying to gauge which way it will go when state-owned Saudi Arabian Oil Co., known as Saudi Aramco, publishes monthly official selling prices this week.

Saudi Arabia's announcement on Tuesday comes just over a week since OPEC and non-OPEC producers including Russian Federation agreed to increase production by 1 million barrels per day from the start of this month. India, South Korea and Turkey - all allies or friends of the United States - are major importers of oil from Iran and are unlikely to be able to switch suppliers entirely by November.

But the U.S. official, Brian Hook, also said that keeping prices stable in the absence of Iranian crude is also important.

Trump tweeted Wednesday that the Organization of Petroleum Exporting Countries is "doing little to help" reduce U.S. gasoline costs and "if anything, they are driving prices higher".

State Department Director of Policy Planning Brian Hook told reporters on Monday that Iran is not a "normal" country and must meet 12 demands in order to be relieved of USA sanctions. "Looks like OPEC is at it again", Trump tweeted in April. USA oil prices jumped 8 percent last week.

"OPEC has not defined oil prices for the past 30 years, it is a financial market", said Ardebili.

OPEC-member Iran, however, has warned it would not accept other producers reaping the benefits by taking its market share. And you say it is a two-way road!? He said in the Fox interview that European companies would face sanctions if they traded with Iran now.

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