Iran says Trump rhetoric to raise oil prices to $100
- Author: David Armstrong Jul 09, 2018,
Jul 09, 2018, 0:35
Brent crude futures were changing hands at $78.10 per barrel, up 34 cents, or 0.4 percent, from their last close.
For the week, WTI futures lost about 0.5 percent after hitting a 3-1/2-year high on Tuesday, while Brent lost about 3 percent.
U.S. President Donald Trump on Wednesday again accused the Organization of the Petroleum Exporting Countries of driving gasoline prices higher and urged the oil producer group to do more. His latest was a reminder that the U.S. defends many OPEC members for "very little" money.
Speaking to the Wall Street Journal, Michael Cohen, Head of Energy Commodities Research at Barclays, said the market was now "caught between two forces".
Saudi Arabia cut pricing for most of its oil grades as the world's biggest crude exporter is increasing production to assure buyers there is sufficient supply following U.S. President Donald Trump's demands that OPEC do more to stabilize oil markets.
Prices were also pushed up by looming USA sanctions against Iran, which threaten to cut supplies to an already tight market despite pledges by producer cartel OPEC to raise output to make up for the disruptions.
Recent price rises have also been spurred by a US announcement that it plans to re-introduce sanctions against Iran from November, targeting oil exports.
Iranian OPEC Governor Hossein Kazempour Ardebili claimed Thursday Trump's tweets are putting upward pressure on prices. "You impose sanctions on major producers, founders of OPEC, and yet you are asking them to reduce the prices?!"
In addition to reducing the price of its August barrels, Saudi Arabia also told the Organization of the Petroleum Exporting Countries (OPEC) that it increased production by nearly 500,000 barrels per day last month.
The escalating trade row between Washington and Beijing, which triggered another sell-off in Asian stocks on Thursday, was also felt in oil markets, with China warning it could introduce duties on US crude imports at an as yet unspecified date. "The UAE can increase production at a point when oil price remaining high so they will increase their market share and it is positive for economic outlook and also the fiscal positon will see a surplus this year due to higher oil revenues", she said.
"You are hammering on good guys in OPEC", Kazempour said, according to Bloomberg.
At the time, Trump tweeted that he spoke with Saudi Arabia's King Salman to ramp up oil production to lower prices. The U.S. market will not have a settlement price due to the U.S. Independence Day holiday. An explosion at a transformer station at the Syncrude oil facility in Canada, meanwhile, could idle about 350,000 barrels of oil per day until the end of July.
"This is business, Mr. President - we thought you knew it", he added.
Venezuelan production fell to 1.36 million bpd by June, compared to just under 2.5 million bpd at the start of a year ago, amid a structural underinvestment in the country. Their impact will also have negative repercussions for Europe and other traditional allies, many of whom are already frustrated by the announcement of new tariffs on their imports to the U.S.
Foreign ministers from the five remaining signatories of a nuclear deal between Tehran and world powers will meet Iranian officials in the Austrian capital to discuss how to keep the accord alive after the USA withdrawal from the pact.