Economy

Donald Trump: OPEC is "doing little to help" with gas prices

Donald Trump: OPEC is

US President Mr Donald Trump tweeted that the Saudi King had agreed to a proposal to increase Riyadh's daily oil production to two million barrels.

On Sunday, Iran's Vice President Eshaq Jahangiri said that the country was considering oil exports by the private sector in a bid to thwart USA sanctions.

Trump, who is spending the weekend at his golf property in New Jersey, said in a tweet on Saturday that Saudi Arabia's King Salman bin Abdulaziz Al Saud had agreed to produce more oil.

Iran's OPEC governor Hossein Kazempour Ardebili said the USA ban amounted to "self harm", adding that Iran's position is that oil should not be used as a weapon or for political purposes. "REDUCE PRICING NOW!" Trump wrote on Twitter. Asked if someone was manipulating oil markets, Trump said: "OPEC is and they better stop it because we're protecting those countries, many of those countries".

Oil prices have risen to multi-year highs of around $78 per barrel in recent days.

Saudi Arabia now produces some 10 million barrels of crude oil a day.

Oil prices are giving observers vertigo.

Meanwhile, Iranian Oil Minister Bijan Zanganeh sent a letter to the Organisation of Petroleum Exporting Countries (OPEC) asking its members to adhere to the group's agreement reached last month to collectively raise output and "refrain from any unilateral measures" that could undermine the unity of the producer group.

Oil is surging as the US pushes allies to end imports of Iranian crude, as global supply disruptions persist and American crude inventories are already at the lowest since January.

Ie, getting OPEC and non-OPEC countries to cut oil output at a time traders would be complacent about an over-supplied oil market.

Ardebili also claimed that Trump's words are "discrediting" OPEC. Saudi Arabia itself is facing revenue problems because the prices of oil remained low for several years and the Kingdom is spending hugely on developmental activities.

Some are saying that the United States' recent declaration of zero tolerance for Iranian exports has caused bullish investors to reassess the impact of USA sanctions on Iran's exports, believing that shipments may fall by 1.1 million bpd by year end. This means that unless Saudi Arabia manages to drive every single American fracker off the oil market, it can no longer effectively play any of these three games and drive oil prices higher ahead of the Aramco IPO. Morgan Stanley now expects shipments to drop by 1.1 million bpd by the end of the year after previous forecasts saw the Iranian sanctions wiping out 700,000 bpd through 2019.

In Asia, the world's top oil consuming region, seaborne oil imports have been falling since May, as higher costs turned off consumers and as the escalating trade dispute between the United States and China starts to impact the economy. Like I said, the world has changed significantly since OPEC's heyday.



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