US Crude Oil Price Rise Still Possible Once Consolidation Period Ends

Gladys Abbott
July 9, 2018

President Donald Trump has again lashed out at an worldwide body - this time, it's the Organization of the Petroleum Exporting Countries (OPEC), which he accused Wednesday afternoon of driving up gas prices.

LONDON, July 5 (Reuters) - Oil fell on Thursday after U.S. President Donald Trump demanded OPEC cut crude prices, but the market found some support from an Iranian threat to block shipments through the Strait of Hormuz. "This must be a two way street, REDUCE PRICING NOW!"

The world's biggest crude exporter is preparing to ramp up oil production, possibly by as much as two million barrels per day, amid U.S. sanctions on Iran.

Oil prices edged up on Wednesday, lifted by a report of declining USA fuel inventories amid the ongoing crude supply outage at Syncrude Canada in Alberta, which usually supplies the United States.

Iran's OPEC governor Hossein Kazempour Ardebili said. Any time there's talk of increased production or even a suggestion, prices tend to go down.

In the latest of the US-China trade spat, China's Commerce Ministry spokesperson Gao Feng said America's tariffs will backfire and damage the world economy because more than half of the $34bn of Chinese exports are produced by foreign companies.

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The head of Iran's Revolutionary Guards said on Thursday their forces were ready to implement Iran's threat to block the Strait of Hormuz and that if Iran can not sell its oil under the USA pressure, no other regional country will be allowed to.

US West Texas Intermediate crude futures were down 16 cents, or 0.2 percent, at.98 per barrel.

A U.S. government report on crude stockpiles rising 1.3 million barrels showing unexpectedly ample supplies after analysts had forecast a decline also weighed on prices this week.

On Tuesday, crude closed near 78 dollars per barrel, driven higher by a sharp drop in US inventories and the expectation of more drivers hitting the road for the July 4 holiday.

"The responsibility of paying unnecessary prices for oil by all consumers of the whole world, especially in United States gas stations, is exclusively upon your (Trump's) shoulders and the price of over $100 per barrel is yet to come", he said. Last month, in an interview with Reuters, he said that "you (Trump) can not place sanctions on two OPEC founder members and still blame OPEC for oil price volatility". 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. International Brent crude slipped below $77 on world markets. But oil experts say that OPEC is already close to its maximum capacity.

The recent strength in oil prices has, in part, been spurred by a United States announcement that it plans to re-introduce sanctions against Iran, Opec's third-largest producer, from November, targeting oil exports.

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