Trump demands OPEC lower oil prices: 'We will remember'

Ivan Schwartz
September 23, 2018

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher early Thursday, continuing to be supported by lower U.S. crude oil inventories and global supply worries.

Trump weighed into the debate via Twitter, saying "The OPEC monopoly must get prices down now!" Meanwhile, an industry report Tuesday showed US crude stockpiles increased 1.25 million barrels last week, defying expectations for a decline ahead of government data.

"It's complicated. Saudi Arabia has to balance oil supply and demand, and it has to balance oil prices so they don't rise too much before the United States elections", one OPEC source told Reuters.

According to Tamas Varga, a strategist with PVM Oil Associates, the question is not about the price movements being justified, rather, the current dictator of crude oil's price is the ability of producers to supply the amount of oil actually needed.

Jason Gammel, analyst at US bank Jefferies, said he expects Saudi Arabia to try to keep the oil market adequately supplied into 2019, "but at the cost of spare capacity", a key supply buffer to prevent oil price volatility. A Bloomberg survey of analysts forecasts a 2.5-million-barrel decline in nationwide inventories. They also don't want oil prices to fall too much'. USA light crude oil was 40 cents higher at $71.52 after rising almost 2 percent on Wednesday.

Opec and oil producers outside the group, including Russian Federation, will meet on Sunday to revise oil production quotas.

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But the reduction in Iranian and Venezuelan production, the cartel's total output increased by 437,000 barrels, as other members filled the void.

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.

USA crude oil exports averaged 2.37 million barrels per day last week, up 539,000 barrels per day from the previous week. The freeze on output levels has helped to remove over-capacity from the market, meaning oil producing nations are benefiting from higher prices.

His complaint follows signals from Saudi Arabia that it was content to see prices climb above $80 a barrel.

Jason Gammel, analyst at USA bank Jefferies, said he expects Saudi Arabia to try to keep the oil market adequately supplied into 2019, "but at the cost of spare capacity", a key supply buffer to prevent oil price volatility. Over the past four weeks, refinery inputs averaged 17.62 million barrels per day which was 14.7 percent higher than the same four-week period of previous year.

Other reports by GizPress

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