Oil mixed as investors short-cover and Saudi boosts output

Ann Santiago
July 9, 2018

"The OPEC Monopoly must remember that gas prices are up & they are doing little to help", he wrote.

The war of words over oil prices continues between US President Donald Trump and Iran, and the latest salvo from Iran is for Trump to stop tweeting.

"With contentious midterm US elections looming, the President continues to strong-arm Saudi Arabia to increase oil supplies which, at least for now, is containing price action below WTI $75 per barrel", said Stephen Innes, Head of Trading for Asia/Pacific at futures brokerage OANDA.

Iran's OPEC governor Hossein Kazempour Ardebili said the USA ban amounted to "self harm", adding that Iran's position is that oil should not be used as a weapon or for political purposes.

President Donald Trump has significantly increased global oil prices through his tweets, Iran's OPEC chief said this week. "Pls stop it, otherwise it will go even higher!" the Iranian official added. "We are telling relevant markets and countries, which will purchase our oil, that we will buy goods in case they purchase our oil", a representative of the Iranian parliament's energy committee, Asadollah Qarekhani, was quoted by Sputnik as saying.

Iran has threatened to block oil exports through a key Gulf waterway in retaliation against any hostile United States action.

The sanctions would include a universal ban on Iran over buying or acquiring United States dollars as well as restrictions over purchases of crude oil from the country and investing in its oil sector projects.

Crude inventories fell by 4.5 million barrels in the week to June 29 to 416.9 million, compared with analysts' expectations for a decrease of 3.5 million barrels.

West Texas Intermediate crude for August delivery traded at $73.57 a barrel on the New York Mercantile Exchange, down 57 cents, at 10:33 a.m. London time. 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.

Brent crude, the global benchmark, was down 19 cents at $77.20 a barrel by 0910 GMT.

"Opec will, from July 1, strive to adhere to the overall conformity levels for the remaining duration of the Declaration of Cooperation", said Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Industry, on Tuesday.

Looming U.S. sanctions on Iranian crude exports, force majeure in Libya and unplanned pipeline outages in Nigeria are meeting rising output by OPEC and clouding the supply outlook generally.

Trump has repeatedly called on the oil cartel to reduce prices.

China has indicated that it could place a tariff of 25 percent on USA oil.

Oil prices have climbed sharply in recent months, with the price of a barrel hitting a multi-year high of around $78 on Wednesday.

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