Oil prices ease as Trump tweets warning at OPEC

Marco Green
September 23, 2018

U.S. President Donald Trump on Thursday issued a fresh call for Organization of the Petroleum Exporting Countries (OPEC) to lower crude prices, saying the United States was providing Middle Eastern energy giants with security and hence in turn these countries should provide relief.

Trump's comments come ahead of the Organization of the Petroleum Exporting Countries meeting with Russian Federation and other big producers for the World Oil Outlook meeting in Algiers this weekend where they will discuss boosting output to push prices down and compensate for looming sanctions on Iranian oil.

Decisions are only binding when they are made by all OPEC member states, Zanganeh said, adding that he "will block any decision posing threats to Iran".

US sanctions on Iran's oil sales take effect on November 4, and Trump has vowed to curb exports from OPEC's third-biggest producer to zero. USA light crude CLc1 was down 32 cents to settle at $70.80 a barrel after rising almost 2 percent on Wednesday.

Under pressure from the US president, the Organization of the Petroleum Exporting Countries, Russia and other allies agreed in June to boost production by 1 million barrels per day, having participated in a supply-cutting deal since 2017.

Despite Thursday's losses, Brent prices have flirted with $80 a barrel this month, the highest price since May.

Opec and its allies are scheduled to gather in Algeria on Sunday to discuss how to allocate higher supply to offset the shortage of Iranian supplies.

For this year's April-September driving season, the EIA expects USA regular gasoline retail prices to average $2.87 a gallon, up 19% from a year ago, mostly due to expectations of higher crude oil prices. Bloomberg tanker tracking data also indicates 30% decline since April and further shrinkage is expected for coming months as oil-related sanctions U.S. sanctions are scheduled to be implemented soon.

In a visit to Moscow this month, U.S. Energy Secretary Rick Perry asserted Saudi Arabia, the United States and Russian Federation can between them raise global output in the next 18 months to compensate for falling oil supplies from Iran.

Brent futures gained 36 cents a barrel to $79.39.

This has helped lead to higher prices at the pump. At first it seemed to work - the price slump worsened and put vast financial pressure on OPEC, but also triggered a collapse in US drilling and forced producers to close the taps.

Ten years ago, a banking crisis triggered a global economic downturn and a crash in oil prices as demand was obliterated.

Negative results from crude stocks report on build of oil inventories would weaken near-term structure further and risk deeper fall, which needs confirmation on close below a cluster of daily MA's at $69.00/$68.80 zone. Saudi Arabia and Russian Federation said the increase would be about 1 million barrels a day.

Other reports by Click Lancashire

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