Trump bullies OPEC...again

Daniel Fowler
September 23, 2018

US West Texas Intermediate crude for October delivery was up 7 cents, or 0.10 per cent, at $70.39 a barrel. This comes after the June 22 agreement between the OPEC (Organization of the Petroleum Exporting Countries) and Russian Federation for increasing the production and reducing the prices.

USA oil production in August averaged 10.9 million barrels per day, the EIA estimates - up by 120,000 barrels per day in June.

Oil prices eased on Thursday, pulling back after U.S. President Donald Trump urged OPEC to increase production at its meeting in Algeria, and slowing bullish momentum that had previously propelled the market toward four-year highs.

According to the Weekly Petroleum Status Report by EIA, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve (SPR), decreased 2.06 million barrels during the week ending September 14.

USA crude inventories fell last week for the fifth straight week by 2.1 million barrels, according to the Energy Information Administration's weekly data reported on Wednesday.

Disruptions to Iranian production stemming from USA sanctions are being given credit for the discrepancy.

Crude inventories declined by 2.1 million barrels, the EIA data showed, compared with expectations for a decrease of 2.7 million barrels.

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He has consistently complained that oil prices are too high.

He indirectly criticized Saudi Arabia for vowing to compensate for the market demand after the United States imposes oil sanctions against Iran on November 4. This estimation was done by the EIA (Energy Information Administration).

Week over week, US crude oil exports rose by 539,000 barrels a day last week and USA production rose from 10.9 million barrels a day to 11.0 million. It seems the damage from the Iran sanctions is underpinning the market, encouraging speculators to buy on the dips, while fresh supply news like weekly API and EIA reports is providing the firepower for weekly price spikes. This has helped lead to higher prices at the pump.

The news that OPEC may increase production by a half-million barrels quickly quelled those concerns. USA light crude was up 45c at $70.77.

Fears over supply shortages have boosted crude prices in recent weeks, and global benchmark Brent was trading above $79 a barrel on Thursday.

"Spare capacity could fall below 1 percent of demand by year-end if Iranian exports fall below 1 million barrels per day, as now seems likely", Gammel said. Exports of refined products rose by 363,000 barrels a day last week to 5.22 million barrels a day.

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