Trump tweeted Wednesday that the Organization of Petroleum Exporting Countries is "doing little to help" reduce USA gasoline costs and "if anything, they are driving prices higher".
President Donald Trump lashed out again at the Organization of the Petroleum Exporting Countries, or OPEC, in his long-running campaign against the oil price cartel. If anything, they are driving prices higher as the United States defends many of their members for very little $'s. He added, "This must be a two way street".
"With contentious midterm USA 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.
Don't miss out on the latest news and information. Prices at the pump have soared in recent months, hitting a four-year high Wednesday. Iran's OPEC governor, Hossein Kazempour Ardebili, had earlier on Thursday urged Trump to stop tweeting about oil, saying his missives were backfiring and driving prices higher.
Now that prices have rebounded from a low of $30 a barrel in January 2016 to approximately $75, OPEC and other exporters (led by Russia) have agreed to slowly increase exports by what will effectively be 700,000 barrels a day now, with another half million barrels later in the year as sanctions on Iran take effect.
Former Shell Oil President John Hofmeister on the outlook for oil prices. The global community had expected sanctions waivers for some countries, a tactic used in the Obama era to avoid supply shocks.
"You are hammering on good guys in OPEC", Kazempour said.
Actual and likely production losses are adding up: (1) production is most at risk in Iran, with the United States administration targeting a significant drop in exports that could threaten more than 1 mb/d by year-end, (2) Venezuela production continues to decline at a pace of c. 170 kb/d per quarter, (3) Libya production has also been disrupted following violence in the east of the country leaving exports suspended from Eastern ports, with flows now down by 600 kb/d, and (4) Canadian production will likely be down by 360 kb/d through July because of an outage at the Syncrude Canada plant. "Please stop this method". Analysts and traders were predicting a draw of 1 million barrels.
Meanwhile, US crude oil production has soared by 30 percent in the last two years, to 10.9 million bpd.
This time around, the US sanctions and the tough USA approach to try to cut off as many Iranian oil barrels as possible have spooked banks, insurers, and shippers, who have started to wind down business with Iran for fear of coming under secondary sanctions.