Saturday, 17 November, 2018

What Is OPEC? Trump Attacks Oil Price 'Monopoly'

Saudi Arabia's Minister of Energy Industry and Mineral Resources Khalid Al Falih speaks during a press conference with his Russian counterpart Alexander Novak at the Ritz Carlton Hotel in the capital Riyadh on Feb. 14 2018 What Is OPEC? Trump Attacks Oil Price 'Monopoly'
Nellie Chapman | 05 July, 2018, 20:56

Brent crude, the global oil benchmark, fell 0.27% to $78.04 a barrel on London's ICE Futures exchange. West Texas Intermediate, the USA benchmark for the price of oil, was up 1.51 percent to $75.06 per barrel, its highest level since November 2014.

Trump again on Wednesday accused the Organization of the Petroleum Exporting Countries of driving up fuel prices.

Oil will soon cost $100 per barrel due to supply disruptions caused by U.S. President Donald Trump, Iran's OPEC Governor told Reuters on Thursday, as he warned expectations that Saudi Arabia and Russian Federation would help bring down prices were in vain. If anything, they are driving prices higher as the United States defends many of their members for very little $'s.

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

Brent crude futures LCOc1 were at $77.82 per barrel, up 6 cents from their last close. The company said it can pump as much as 3.3 million barrels per day and will boost output to 3.5 million barrels a day by the end of 2018.

USA crude stockpiles are forecast to have declined 5 million barrels last week, according to a Bloomberg survey ahead of government data to be released on Thursday.

OPEC reached an agreement in June to increase output, but this did little to stop the rise in oil prices.

In May, the US retreated from a multilateral deal with Iran regarding its nuclear disarmament program, and imposed sanctions to limit the world's fourth largest oil exporter's access to global markets.

Vijay Valecha, chief market analyst at Century Financial Brokers, said the UAE's crude oil production peaked in October 2016 at 3.13 million bpd and has declined since then in line with the Opec production cuts.

Last month, Saudi Arabia and Russian Federation agreed to increase production and the USA continues to produce at record levels, however, unless there is a drop in demand, it appears we are headed toward a supply deficit later this year.

In May, US President Donald Trump pulled out of a multinational deal under which sanctions on Iran were lifted in return for curbs to its nuclear programme.

The early reaction to Trump's tweet was normal.

"If they want to stop Iranian oil exports, we will not allow any oil shipment to pass through the Strait of Hormuz", Ismail Kowsari, an Iranian Revolutionary Guards commander, told Iran's Young Journalists Club, Reuters reported.

The development came days after the oil-rich Persian Gulf state, which is the world's largest oil exporter, agreed to substantially raise production. Long story short, he's anxious that higher prices at the pump will eat away at the savings he imagines are accruing to USA consumers as a result of the tax cuts.