Trump blasts OPEC ahead of World Oil Outlook summit

Gladys Abbott
September 23, 2018

With crude oil prices steadily climbing to $80 a barrel, President Trump on Thursday again slammed OPEC - tweeting that prices keep rising even as the USA spends billions to safeguard oil-producing Mideast countries.

US President Donald Trump increased pressure on Opec on Thursday, calling on the organisation to "get prices down now". Earlier this month, Saudi shipments into the USA reached a four-week average of 1 million barrels a day for the first time since late 2017, according to government data.

Trump's comments come ahead of the Organization of the Petroleum Exporting Countries meeting with Russian Federation and other big producers for the World Oil Outlook meeting in Algiers this weekend where they will discuss boosting output to push prices down and compensate for looming sanctions on Iranian oil.

The current price action confirms the notion that the crude oil market is "fragile" and highly sensitive to the upside on any news that even hints at lower supply.

The prospect of United States sanctions hitting Iran's roughly 2 million barrels per day in crude exports from November, when the rest of OPEC has limited spare capacity, has helped oil stay well above $70 a barrel since May, when Washington announced it would ditch an global nuclear agreement with Tehran.

Crude inventories fell by 2.1 million barrels, compared with expectations for a decrease of 2.7 million barrels. They also don't want oil prices to fall too much'.

USA crude oil imports averaged 8.02 million barrels per day last week, 433,000 barrels per day higher than the levels of the previous week.

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Crude oil prices and energy-related exchange traded funds jumped as USA oil inventories slip to a three-and-a-half year low on rising exports.

United States pulled out in May from Iran's nuclear deal, called the Joint Comprehensive Plan of Action or JCPOA and resumed financial and industrial sanctions on the country in August and the additional oil-related sanctions would be imposed on November 4. Saudi Arabia, Russia and other major producers are scheduled to meet in Algiers on Sunday to review their strategy after the group agreed to increase production in June.

USA light crude was up 46 cents at $70.77, after earlier touching a high of $71.80.

Iran, for example, has indicated it is happy with oil at $80 per barrel, so would presumably oppose a production increase.

US crude oil exports averaged 2.37 million barrels per day last week, up 539,000 barrels per day from the previous week. NYMEX crude is hovering at $70 per barrel, with a gain of almost 18 percent this year, while Brent, which measures the global market, nears the $80 per barrel mark, up almost 19 percent this year.

Refinery activity started to slow down from record highs reached a month ago with crude runs down 442,000 bpd and utilization rates off 2.2 percentage points to 95.4 percent of nationwide capacity, EIA data showed. Exports of refined products rose by 363,000 barrels a day last week to 5.22 million barrels a day.

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