Oil rises even as Donald Trump demands OPEC cut prices

Oil rises even as Donald Trump demands OPEC cut prices

Oil rises even as Donald Trump demands OPEC cut prices

A senior Iranian official has asked US President Donald Trump to refrain from tweeting about oil as he believes the tweets are driving up the price of the commodity. On Wednesday he tweeted that OPEC is "doing little to help", adding that, "if anything, they are driving prices higher".

In a follow-up Twitter message on July 4, the president said that "the United States defends many of those countries for very little $´s".

Speaking to the Wall Street Journal, Michael Cohen, Head of Energy Commodities Research at Barclays, said the market was now "caught between two forces".

The US Energy Information Administration informed that commercial crude oil inventories increased by 1.2 million barrels last week. The bank said that US efforts to block Iran from exporting oil would make it hard for OPEC to meet supply demands, forcing prices to rise.

Although Iran does not have spare capacity to pump more oil to offset lower oil prices, experts say renewed sanctions mean the country is more interested in tightening the screws on arch-rival Saudi Arabia that prefers higher prices.

Ardebili's accusations came as oil prices have surged in recent months.

"President Trump's tweets are adding to the existing concerns".

Energy consultancy FGE on Friday issued a stark warning of looming supply shortages due to US sanctions against Iran, and because of disruptions elsewhere.

Saudi Arabia - the world's largest oil exporter - confirmed on Saturday that Trump spoke with King Salman by phone, and that the two discussed the need to preserve "stability" in the oil market and efforts of oil-producing countries to compensate for any potential shortage.

The global benchmark slipped 23 cents, or 0.3%, to US$78.01 a barrel at 2:05pm in London. As a result, UBS raised its forecast for the price of Brent crude oil from around $80 per barrel for the six month range to $85 per barrel.

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.

Meanwhile, the market continued to watch rising USA crude output, with this week's oil drilling rig count data, an indicator of future production, due at 1 p.m.

In post-settlement trade, prices extended gains after the American Petroleum Institute said crude stockpiles had fallen more than expected last week.

Traders said supply disruptions could be short-lived as Opec and allied producers ramp up output.

In May, the USA retreated from a multilateral deal with Iran regarding its nuclear disarmament program, and imposed sanctions to limit the world's fourth largest oil exporter's access to global markets. While the comments were ambiguous, Iranian officials in the past have threatened to block the Strait of Hormuz, a major oil shipping route, in retaliation for any hostile USA action.

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.

US and Saudi objectives are not fully aligned, however, on oil prices.

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