Trump's tweets driving up oil prices

Trump's tweets driving up oil prices

United Press International reports in its article Iran blames Trump for the spike in oil prices that U.S. President Donald Trump continues to put pressure on U.S. allies in the Organization of Petroleum Exporting Countries.

Benchmark Brent crude oil was up 50 cents at US$77.80.

West Texas Intermediate crude for August delivery fell 63 cents to $73.51 a barrel at 11:37 am on the New York Mercantile Exchange.

The Iranian governor to OPEC said Thursday the USA president should avoid stepping into the production group's work with calls to drive down the price of oil. The president said the US defends many OPEC member states, insinuating that as a returned favor, these nations should cave to Washington's demands. This must be a two way street.

However, oil prices have shot up and Trump, anxious about the impact on United States voters ahead of November midterm elections, is appealing to the Saudis for help.

Oil prices rose on Tuesday after Libya declared force majeure on some of its crude exports, while the loss of Canadian supplies helped lifted US crude to 3-1/2-year highs. Now that prices have rebounded from a low of $30 a barrel in January 2016 to about $75, OPEC and other exporters led by Russian Federation 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. The Saudis said on Tuesday that they would increase production to offset what's not coming into the market from Venezuela and Iran (whose oil markets have been hobbled by sanctions), but did not say by how much. "While OPEC's effect on oil prices remains notable, the commodity is also rising for other reasons", Trump said Wednesday on Twitter.

Earlier, Kazempour Ardebili had said that Trump's pressure on global firms not to buy Iranian oil would drive prices higher and end up hurting the American economy.

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As the Trump administration prepares to re-impose sanctions on companies that purchase Iranian crude oil, Iran is responding by threatening to pull back the amount of oil it exports to neighboring countries, which could significantly disrupt the world supply.

Top exporter Saudi Arabia told OPEC it had raised oil output by nearly 500,000 barrels per day last month, OPEC sources said, a sign Riyadh wants to make up for shortages elsewhere and dampen prices.

The price went up when OPEC chose to cut production past year. Saudi Arabia's all-time record high output level stands at about 10.7 mb/d.

Hossein Kazempour Ardebili, Iran's ambassador to the Organization of the Petroleum Exporting Countries (OPEC), was quoted by media as saying that the world - and specifically American consumers - would eventually consider Trump blameworthy for runaway oil prices in worldwide markets.

The U.S. government is lobbying Iranian oil importers, including China and India, and "asking them to go to zero, absolutely yes", according to a U.S.

Iran exported more than 2.4 million barrels a day in May, according to the IEA.

USA and Saudi objectives are not fully aligned, however, on oil prices.

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