Oil price up as Trump calls OPEC to lower prices

Marco Green
September 24, 2018

J.P. Morgan said in its latest market outlook, published on Friday, that "a spike to $90 per barrel is likely" for oil prices in the coming months due to the Iran sanctions.

He said on Twitter "they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices". "We will remember. The OPEC monopoly must get prices down now!"

"The markets are adequately supplied".

"The market does not have the supply response for a potential disappearance of 2 million barrels a day in the fourth quarter", Jaeggi said in a speech at the S&P Global Platts Asia Pacific Petroleum Conference (APPEC) in Singapore.

"Given the numbers we saw today, that (an output increase in 2019) is highly unlikely unless we have surprises on the supply and demand", Falih added.

Trump's statement was not his first criticism of OPEC.

"With demand remaining strong in the short term, we still see oil balances constructing higher oil prices".

Oil prices were mixed on Friday after falling in the previous session as U.S. President Donald Trump urged OPEC to lower crude prices ahead of its meeting in Algeria this weekend.

Saudi Arabia and Russian Federation won't add significantly more oil to the market because of a lack of capacity, a top Iranian official said on Monday, predicting prices will probably rise further.

The market was "increasingly concerned about dwindling (U.S.) inventories", ANZ bank said on Monday. Trump tweeted on Thursday.

One problem is the uncertainty over how much oil will be lost when the US -led sanctions against Iran begin in November. Output fell below those targets this year, and in June the same countries agreed to boost the oil supply.

But Falih - attending a meeting of oil producers in Algiers - left the way open to a future production hike, as supplies tighten due to the U.S. imposing sanctions on Iranian oil from November this year.

Iran told OPEC its production had been steady in August at 3.8 million barrels per day.

"They are sacrificing OPEC, they are destroying OPEC and slowly, without directly saying so, they want to gather some names together to create a forum to replace OPEC and manage the market", Zanganeh told Platts.

Falih said returning to 100 percent compliance was the main objective and should be achieved in the next two to three months.

"There is no spare capacity".

The biggest source of new global supply, US shale, is also experiencing growing pains as pipeline bottlenecks and workforce issues may hamper growth, he said. "We in Saudi Arabia have not seen demand for any additional barrel that we did not produce".

The OPEC/non-OPEC monitoring committee next meets on November 11 in Abu Dhabi, followed by a full OPEC gathering at its Vienna headquarters on December 6-7.

Other reports by Click Lancashire

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