Saudi King made no promises on oil production despite Trump's request

Saudi King made no promises on oil production despite Trump's request

Saudi King made no promises on oil production despite Trump's request

The US President says he asked Saudi Arabia's King Salman to increase his country's output, in response to turmoil in Iran and Venezuela.

The world's top oil exporter plans to pump as much as 11 million barrels of oil per day (bpd) in July, an oil industry source told Reuters this week, after OPEC agreed with Russian Federation and other oil producers to raise output by about 1 million bpd.

Iran has accused Trump of trying to politicize OPEC and said it was USA sanctions on Iran and Venezuela that had helped push up prices.

"If we take 2 million barrels of oil off the market, what is going to be left in the tank?"

"In this case, Saudi Arabia's output [with two million bpd spare capacity] needs to increase by at least 400,000 bpd in the second half of 2018 to offset the supply shortfall and lead to a marginal increase in global inventory levels".

OPEC agreed with Russian Federation and other oil-producing allies this month to raise output from July by about 1 million bpd.

If the Saudis had agreed to Trump's request, "that means he is calling on them to walk out from OPEC", Iran's OPEC governor Hossein Kazempour Ardebili, said in an interview.

"We'll need more oil down the road and there'll be nowhere to get it", said Flynn, of the Price Futures Group.

Though the OPEC didn't disclose country quotas in the recent announcement of 1bpd output hike, Bell sees there are a few countries with available capacity to raise production and any increase in production would be borne most significantly by Saudi Arabia, the UAE and Kuwait.

Iranian exports have been running around 2.4 million barrels a day, according to the International Energy Agency.

The average per-gallon price for gasoline in the United States was $2.85, a jump of 63 cents from a year ago, according to AAA.

"Oil prices are too high, OPEC is at it again".

Brent crude, the worldwide benchmark, was selling Friday for over $79 a barrel, and there is talk that in certain circumstances a return to $100 a barrel oil is possible.

State Department officials said this week the United States is prepared to work with countries on a case-by-case basis to help them reduce imports of Iranian oil.

But OPEC's promises did not settle the markets, and crude oil futures have spiked since the meeting. "He has agreed!", Trump said on Twitter Saturday. He questioned whether Trump's words would do anything to reverse the effects on the market of declining Iranian oil production.

Besides the looming USA sanctions against Iran, which is fueling the rally in Brent futures, and the outage in Canada, which is supporting WTI crude, both markets are also benefitting from supply issues in Venezuela and Libya.

The Saudi government said on its official website that the two leaders had spoken about oil production, but avoided suggesting any specific deal had been struck.

Related news

[an error occurred while processing the directive]