Trump renews attack on OPEC, says oil prices too high

Ivan Schwartz
June 16, 2018

Washington: US President Donald Trump on Wednesday accused the Organization of Petroleum Exporting Countries of driving up oil prices, in a fresh swipe at the cartel´s agreement to cap production.

Oil prices fell on Wednesday, hit by rising supplies in the United States and expectations that producer group OPEC could relax voluntary output cuts.

The 14 oil-producing nations in OPEC - Saudi Arabia, Iran, Iraq, Kuwait and Venezuela among them - produce about 40 percent of the world's oil, but about 60 percent of the oil traded on global markets.

Saudi Arabia last month signaled it was ready to boost output in the second half of the year to ease consumer anxiety about higher prices, a policy U-turn for the kingdom that only weeks earlier advocated for production restraint.

"If the other 12 OPEC members were to continue pumping at the same rate as May, a potential supply gap could emerge and lead to a draw on stocks of more than 1.6 million bpd in the fourth quarter of 2019", the report said.

On the New York Mercantile Exchange, West Texas Intermediate futures rose 0.4% to $66.89 a barrel.

There are now fears that prices could rise steeply if supplies are disrupted from OPEC members Venezuela and Iran. "Oil prices are artificially Very High!"

While the world turns its eyes on the Vienna Opec meeting, oil market watchers are also monitoring activity in Trump's home market, where higher prices are feeding more production of American shale oil.

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OPEC has yet to set new production levels beyond that, but the cartel's oil ministers are meeting again next week in Vienna. Trump wrote on Twitter in April.

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Liquids supply in non-OPEC countries increased by 230,000 bpd month-on-month to average 65.99 million bpd, up by 2.09 million bpd year-on-year.

Crude rallied to a three-year high in May, and subsequently lost steam as Saudi Arabia and Russian Federation signaled they may raise output.

Russia's Novak, for his part, said today that the ministers of the OPEC and non-OPEC producers could consider gradually reversing up to 1.5 million bpd of combined production.

Prices last month were further boosted to the highest level since 2014 after a USA decision to reimpose sanctions on Iran threatened to curb exports from the Islamic Republic and as economic turmoil in Venezuela hurt the Latin American nation's output.

Crude loadings at Libya's biggest oil port of Es-Sider and nearby terminal of Ras Lanuf halted after workers were evacuated following clashes, people familiar with the matter said. The EIA and the IEA are trying to "instigate the increase in production of OPEC", Kazempour said.

Iran's OPEC governor, Hossein Kazempour Ardebili, fired back at Trump in a statement to Reuters.

Other reports by GizPress

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