Donald Trump, president of the United States of America has taken to his Twitter handle, again, but with with opposite results to his expressed intent for oil prices cut.
“The OPEC Monopoly must remember that gas prices are up and they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s” Donald Trump, president of the United States of America tweeted 9:46 PM, July 04.
This has had reverse effect on the oil market because oil traded near its highest in three and half years on Thursday, boosted by potential disruptions to flows from Iran and the Middle East Trump saying the Organisation of Petroleum Exporting Countries (OPEC) should cut prices.
Brent crude futures were at 78.12 dollars a barrel. Analysts say Brent poised to reach 100 dollars in spite of spurious price pegging. Brent sweet oil is natural unlike oil from cracking. U.S. crude futures were up 32 cents at 74.46 dollars.
“Your tweets have increased the prices by at least $10. Please stop this method,” the oil ministry news agency quoted Kazempour Ardebili, Iranian OPEC Governor as saying.
Last Sunday Trump tweeted that Saudi Arabia had agreed to increase oil output by up to two million barrels in order to lower prices, and compensate for falling outputs in oil-rich Venezuela and Iran.
The official Saudi Press Agency (SPA), however, mentioned later that Trump and King Salman had simply agreed on “a need to make efforts to maintain the stability of oil markets,” without concluding any formal deal.
OPEC countries and other oil producers reached an agreement at the end of 2016 to reduce oil output by 1.8 million barrels per day compared to October 2016. The deal, aimed at boosting oil prices, was extended twice, with the last one set to last until the end of 2018.
OPEC together with a group of non-OPEC producers led by Russia started to withhold output in 2017 to prop up the market.
Recent price rises have also been spurred by a U.S. announcement that it plans to reintroduce sanctions against Iran from November, targeting oil exports.
OPEC and Russia said in June they were willing to raise output to address concerns of supply shortages due to unplanned disruptions from Venezuela to Libya.
In addition, a potential fall in Iranian supplies due to U.S. sanctions is a factor too.
An Iranian Revolutionary Guards commander, meanwhile, said on Wednesday that Tehran might block oil shipments through the Strait of Hormuz, a major route for transporting crude in the Gulf.
“If they want to stop Iranian oil exports, we will not allow any oil shipment to pass through the Strait of Hormuz,” Ismail Kowsari was quoted as saying.
