Saudis Lower Most Oil Pricing as Iran Taunts Trump on Tweets

Ivan Schwartz
July 6, 2018

Oil prices rose on Tuesday after Libya declared force majeure on some of its crude exports, while the loss of Canadian supplies helped lifted US crude to 3-1/2-year highs.

Trump's move comes as the world suddenly finds itself dangerously short of meeting rising global demand that's set to hit 100 million barrels per day by the fourth quarter, compared to 98.7 million during the same period a year ago.

Oil extended losses after state-owned Saudi Arabian Oil Co. lowered August pricing for most crude grades in Asia and Europe and cut them all in the U.S. Frustrated by rising gasoline prices even after the Organization of Petroleum Exporting Countries agreed to raise output, Trump has called for more action.

US West Texas Intermediate (WTI) crude futures had risen 37 cents, or 0.4 per cent, to $74.51 a barrel by 0650 GMT, compared with their last settlement.

"The OPEC Monopoly must remember that gas prices are up & they are doing little to help", he wrote. This must be a two way street.

President Trump is also anxious to compel European allies to stop buying oil from Iran, which the Trump administration is trying to further isolate with sanctions and by pulling out of the 2015 nuclear deal signed between the United States, Iran, China, Russia, France, the United Kingdom, and Germany.

A blockade of the strait, through which roughly 30 percent of all seaborne oil travels, would have "dramatic consequences for global oil supply and an impact on prices that is nearly impossible to put into figures", Commerzbank said in a note.

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With critical elections ahead, the president has to be sensitive to the financial impact of higher fuel prices on swing voters, which is why he is pressing OPEC and Saudi Arabia to boost output enough to lower them.

Brent crude futures LCOc1 were at $77.82 per barrel, up 6 cents from their last close.

"However with plenty of uncertainty over Iranian supply, and the Syncrude outage in Canada, the market is likely to remain fairly well supported in the near term".

Considering that the U.S.is pushing for "zero" Iranian oil exports and is pressing other countries to stop importing Iran's oil, Tehran may not have many countries left to trade with.

Oil prices have been rocked by recent comments from President Donald Trump.

He's not totally oblivious to the fact that pulling the USA out of the Iran nuclear deal served to embed still more geopolitical risk premium in crude prices.

Other reports by GizPress

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