Published: Fri, July 06, 2018
Money | By Ethel Goodwin

Trump's tweets driving up oil prices

Trump's tweets driving up oil prices

On Saturday, Trump implied that he and King Salman bin Abdulaziz Al Saud agreed that the increased production would brings costs down in the United States, which have risen since America stopped importing Iranian oil. The move lower is attributable to Saudi Arabia's willingness to increase demand at the request of US President Donald Trump. On the other, tightening supplies caused by unexpected disruptions from Libya to Venezuela give the Saudis a ideal excuse to price higher and maximize profit.

Saudi Arabia's state-run oil giant cut its prices on Thursday for first time since February after President Donald Trump lashed out at OPEC for rising U.S. gas prices.

"The kingdom is prepared to utilise its spare production capacity when necessary to deal with any future changes in the levels of supply and demand", a cabinet statement said, following a meeting chaired by King Salman.

"The Trump support base is probably the part of the US electorate that will be the most sensitive to an increase in USA gasoline prices", Halff said.

The US was clearly not satisfied with the Organisation of Petroleum Exporting Countries (Opec) decision last week. Those tweets implied that supply deficits will require all of the world's remaining spare production capacity to come online, according to Standard Chartered.

A two million barrels per day increase would be at least double market expectations.

"You are hammering on good guys in OPEC", Kazempour said.

While the Saudis are likely to increase production of lighter, sweeter export grades, the country also has to consider the impact of bringing too much oil too soon, which could put a strain on its own output.

On May 9, Trump withdrew from the 2015 Iran nuclear deal, sending shockwaves through Iran's economy.

That's an increase of about 55 cents from the same period previous year, according to AAA.

"They seek to push Iranian exports of crude, condensate, and oil products to zero", energy consultancy FGE said in a note.

Oil prices rose on Friday on worries that United States sanctions against Iran would take away significant volumes of crude oil from world markets while oil demand worldwide increases. "Since Venezuela and Libya failed to produce, OPEC countries chose to increase their output by one million barrels to compensate", Sonatrach's CEO noted, adding: "This is why prices stand at the same level". Keeping oil price around $70 per barrel serves both economic and political objective. Its record is 10.72 million barrels in a day.

Oil prices dropped on Monday as supplies from Saudi Arabia and Russian Federation increased and the market continued to absorb the impact of US President Donald Trump's weekend tweets - although analysts expect the decline to be short-lived.

"We will not hesitate to take action when we see sanctionable activity and that is consistent with our policy of economic and diplomatic isolation against Iran".

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