Trump says OPEC 'monopoly' must get prices down

Ann Santiago
September 24, 2018

OPEC leaders are unlikely to heed the president's warnings, however a source told Reuters, "Saudi Arabia is anxious that any sanctions-related spike in oil prices will trigger fresh criticism from Trump, but it also faces doubts over its ability to compensate for a drop in Iranian supply".

The report said that Saudi Arabia wants oil to stay between United States dollars 70 and USD 80 a barrel for now, as the world's biggest crude exporter strikes a balance between maximizing revenue and keeping a lid on prices until US congressional elections. But with Trump keeping up the pressure ahead of the November mid-term elections, "what should stop the Saudis and Russians producing more?" Trump wrote on Twitter.

"It is hard for the US/Trump to complain, because it is the US' secondary sanctions on Iran that is driving the oil market tightness", analysts at Mizhuo Securities said in a note. "We will remember", Trump tweeted.

Data from the InterContinental Exchange showed open interest in calls that give the owner the right to buy Brent futures at $80 and $85 by next week grew by almost 45 per cent on Monday and Tuesday to an equivalent of 54 million barrels of oil.

Prices were supported by sanctions on Iranian supplies and pressured by the potential that Chinese demand could wane. In April, the volume of crude oil transported by tanker and barge from the Gulf Coast to the East Coast reached the highest level since mid-2014. "Novak has done what he could do to help Perry, Al-Falih not yet". As such, his words will be parsed by the market for insights into the country's output plans going forward. U.S. light crude was up 45c at $70.77.

Falih met with Russian counterpart Alexander Novak last weekend to align their positions, with the two ministers saying in a joint statement that they remained committed to "ensuring the adequacy of oil supplies, especially considering market uncertainties on the horizon".

The EIA reports that since mid-2017, the East Coast has been receiving as much crude oil by tanker and barge from the Gulf Coast as it has by rail from the Midwest. Saudi Arabia hasn't yet fulfilled its pledge to lift output to an all-time high, but the kingdom has still added nearly half a million barrels to daily supply since May. "It is humble enough to know it can't dictate the price of oil".

Other reports by

Discuss This Article