Trump Demands OPEC "Monopoly" Bring Oil Prices Down

Trump Demands OPEC

Trump Demands OPEC "Monopoly" Bring Oil Prices Down

U.S. crude oil stockpiles fell for a fifth straight week to three and a half year lows in the week to September 14, while gasoline inventories also showed a larger-than-expected draw on unseasonably strong demand, the Energy Information Administration said on Wednesday.

President Donald Trump on Thursday once again tweeted his belief that major oil producers in the Middle East were conspiring to keep oil prices high, and he seemed to threaten the withdrawal of military resources from the region if the OPEC cartel did not help to lower prices.

Trump's fresh Twitter intervention in the oil market comes before a meeting of ministers from the Organization of Petroleum Exporting Countries and its allies in Algeria on Sunday.

"The OPEC monopoly must get prices down now". US light crude was down 9 cents at $71.03 a barrel after rising almost 2 percent on Wednesday.

Brent crude oil had edged towards the $80 per barrel shortly before Trump's comments, while West Texas Intermediate (WTI) crude had crept above $71 per barrel, despite increased production in Saudi Arabia and Russian Federation. "We will remember", he tweeted. Gordon Gray-HSBC's global head of oil and gas equity research-says that oil market assets are progressively more supportive for crude prices, at least presently.

United States sanctions on Iran are set to hit Tehran's oil sales on November 5, with S&P Global Platts Analytics forecasting that up to 1.4 million b/d of Iranian supplies will be shut-in.

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At the same time, Trump will reimpose sanctions on Iran later this year as part of his decision to withdraw from the nuclear deal, potentially removing a significant oil supplier from the market.

But keeping Iranian barrels off the market tightens supply and puts upward pressure on prices, which creates political risks for Republicans, particularly before midterm elections.

Trump is moving ahead with sanctions against Iran that are already curbing their exports ahead of formal reimposition in November.

It is unclear how easily other producers, such as Saudi Arabia, Iraq and Russian Federation, can compensate for lost supply.

The Oklahoman's energy writer, Adam Wilmoth, wrote that even with the EIA's caution, its report "highlights the rapid increase in US production over the past few years and notes that domestic production likely will continue to grow ..."

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