Saudi Arabia raised oil output by around 500,000 bpd in June

Devin Lawrence
July 9, 2018

United States (U.S.) President Donald Trump reiterated his call for the Organisation of the Petroleum Exporting Countries (OPEC) that exerts significant influence over oil prices to take action to halt crude's upward climb. Some members should remember that the United States is defending them for little reciprocal benefits, he added.

Earlier, the Saudi and Russian energy ministers reaffirmed their 1 million-barrel-a-day agreement reached last month in Vienna, after Trump tweeted over the weekend that he'd received assurances from the Middle Eastern nation that it could increase production by double that volume.

In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase oil output by up to 2 million barrels per day, an assertion that the White House rowed back on in a subsequent statement.

In his bid to halt the flow of Iranian oil without raising prices, Trump has urged Saudi Arabia and other OPEC members to increase their output. "REDUCE PRICING NOW!" Trump tweeted.

Yet despite Riyadh voicing support for Trump, Saudi Arabia may find it tough to compensate for future losses from Iran and persistent supply disruptions from Libya and Venezuela.

Antoine Halff, formerly a chief oil market analyst at the International Energy Agency and now senior fellow at Columbia University, said that Trump made three errors in his tweet: OPEC can influence market prices but is not a monopoly.

Oil was mixed on Thursday, with USA crude slipping and Brent futures little changed after data showed an unexpected build in U.S. crude oil stockpiles.

USA light crude settled up 20 cents at US$74.14 a barrel, rebounding from a session low of US$72.73 a barrel.

Oil prices have risen to multi-year highs of around $78 per barrel in recent days.

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"A key driver of the rise in prices has been the OPEC-Russia deal to cut oil output, compounded by collapsing Venezuelan production and the USA decision to end the Iran deal".

USA crude was bullish after official data on Thursday showed inventories at Cushing, the delivery point for US crude futures, fell to their lowest in 3-1/2 years.

"With those continued drawdowns at Cushing, we were approaching a situation where you could soon start to consider us nearing a shortage", Kilduff said.

"You are hammering on good guys in OPEC", Kazempour said, according to Bloomberg.

Analyst says the difference between Brent crude and U.

An oil pump jack is seen at sunset near Midland, Texas, U.S., May 3, 2017.

The U.S. government is lobbying Iranian oil importers, including China and India, and "asking them to go to zero, absolutely yes", according to a U.S.

The inventory report also showed an increase in imports, which "provided some relief.and showed that even with the Syncrude situation, all is not lost", Kilduff said.

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