Trump Keeps US Oil Reserve in Back Pocket as Pump Prices Climb

07 July, 2018, 10:31 | Author: Brooke Harris
  • Saudi Arabia's Minister of Energy Industry and Mineral Resources Khalid Al Falih speaks during a press conference with his Russian counterpart Alexander Novak at the Ritz Carlton Hotel in the capital Riyadh on Feb. 14 2018

Iran's governor for the Organization of Petroleum Exporting Countries said President Donald Trump's tweets complaining about oil prices are only serving to drive prices higher, Bloomberg reported.

"REDUCE PRICING NOW!", Trump tweeted on Wednesday, accusing OPEC of "doing little to help" lower pump prices.

Trump's efforts to contain spiking oil prices came amid piling pressure on the President ahead of November midterm congressional elections, in which he has to prove claims that tax cuts and federal regulations helped in boosting the economy.

In May, the USA retreated from a multilateral deal with Iran regarding its nuclear disarmament program, and imposed sanctions to limit the world's fourth largest oil exporter's access to global markets. "Please stop it; otherwise it will go even higher". OPEC can not stop disruptive technologies, such as the electric auto, and needs to stop thinking about oil prices by looking at the past, but to pursue cost efficiency and the diversification of their economies.

The price went up when OPEC chose to cut production a year ago.

Crude stocks at the Cushing, Oklahoma, delivery hub for futures fell heavily by 2.1 million barrels, EIA said, dropping overall inventories at the key storage hub to their lowest level since 2014.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 37 cents, or 0.5 per cent, at 73.77 dollars per barrel.

On Monday, Trump took another swipe at OPEC, accusing the oil organization of not helping the United States to reduce domestic gasoline prices.

Crude pared gains after hitting a three-year high in NY as prospects for accelerating supply damped enthusiasm for the rally and traders curbed bullish bets before a US holiday.

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Saudi Arabia told Opec that it increased production by nearly 500,000 barrels per day last month.

Kazempour said Trump was trying to intensify tensions between Iran and Saudi Arabia.

Global benchmark Brent slipped 28 USA cents to settle at US$77.11 a barrel. "This must be a two-way street", he wrote. USA producers will gain market shares, while OPEC will take advantage of the absence of Iranian oil to compensate for the excess production of some of its members.

Volatility in the Middle East and USA foreign policy can have a major impact on oil prices.

OPEC together with a group of non-OPEC producers led by Russian Federation started to withhold output in 2017 to prop up the market.

OPEC and Russian Federation announced in June they were willing to raise output to address concerns of emerging supply shortages due to unplanned disruptions from Venezuela to Libya, and likely also to replace a potential fall in Iranian supplies due to USA sanctions.

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

The U.S. Energy Information Administration (EIA) reports inventories rose by 1.3 million barrels last week, the first increase in three weeks.

Meanwhile, the market continued to watch rising US crude output, with this week's oil drilling rig count data, an indicator of future production, due at 1 p.m.

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