Published: Sat, September 22, 2018
Markets | By Otis Pena

Trump Presses OPEC to Reduce Prices as Crude Trades Near $80

Trump Presses OPEC to Reduce Prices as Crude Trades Near $80

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 U.S. spends billions to safeguard oil-producing Mideast countries.

The president also suggested it was unfair that OPEC raises prices when, "We protect the countries of the Middle East, they would not be safe for very long without us". USA crude inventories fell last week for the fifth straight week by 2.1 million barrels, according to the Energy Information Administration's weekly data reported on Wednesday.

Trump seemed to threaten the withdrawal of United States military resources from the Middle East if OPEC members in the region didn't work to lower prices.

The Republican president has lashed out at the Organization of Petroleum Exporting Countries over the past several months, demanding price cuts and output increases in targeted tweets.

Trump's tweet makes sense "with oil prices close to the highs of the year", said Giovanni Staunovo, commodity analyst at UBS Group AG.

Saudi Arabia is now comfortable with Brent oil prices rising above $80 a barrel, at least in the short term, as the global market adjusts to the loss of Iranian supply, people familiar with the kingdom's view said this week.

At the same time, Trump will reimpose sanctions on Iran later this year as part of his decision to withdraw from the nuclear deal, potentially removing a significant oil supplier from the market.

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"It's also political because the Saudis don't want to pump too much oil then the Iranians complain to OPEC that [Saudi Arabia] is taking [Iran's] market share".

For this year's April-to-September driving season, the Energy Information Administration expects U.S. petrol prices to be up 19% from a year ago, mostly because of expectations for higher crude-oil prices.

OPEC meets on Sunday in Algeria, but the discussion is slated to revolve around current output production levels, and making sure all participants are still on board with things as they now are.

Although supply worries have pushed up oil prices, Opec and its allies were not likely to agree to an official increase in crude output at this weekend's meeting, Opec sources said.

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.

Stockpiles of distillate fuels, which include diesel and heating oil, rose by 1.5 million barrels, the API data showed, compared with expectations for a 651,000-barrel gain.

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