President Trump Pushing Saudi Arabia To Produce More Oil

Trump asks Saudi Arabia to increase oil production | TheHill

The momentum is still continuing, despite worries about the trade stand-off between the U.S. and its allies, which send global stocks and commodities tumbling down.

The Opec oil producers' group agreed to increase output, as did Russian Federation, but this failed to reassure markets. North America's oil markets have tightened significantly this week as an outage of Canada's Syncrude has locked in over 300,000 bpd of production.

The curbs were meant to help drain a global oil glut, a goal that has largely been achieved, though supply disruptions are now adding pressure to prices. If we assume a modest further decline in Venezuela's production and add Iran's likely loss of oil exports, then about one million bpd of additional oil would be needed to fill the gap. At present, the United States is the second largest oil producer behind Russian Federation, and their inventories continued to be on a declining trend. Since the lifting of sanctions in 2016, Iran has returned as a major oil supplier, selling around 2.5 million barrels a day, or more than 2 percent of global supplies. However, the group failed to announce a clear target for the same.

Riyadh plans to boost output to 11 million bpd, the highest in its history, in July up from 10.8 mln in June, a source familiar with Saudi output plans told Reuters this week.

While the market was prepared for wide swing after the OPEC meeting, the outcome had initially limited the price impact.

High gasoline prices traditionally bring a public backlash during USA elections.

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The Trump administration is pushing countries to cut all imports of Iranian oil from November when the United States re-imposes sanctions against Tehran, after Trump withdrew from a 2015 nuclear deal agreed between Iran and six major powers.

"Any increase in the production by any member country beyond commitments stipulated in OPEC's decisions. would constitute breach of the agreement", Zanganeh wrote in the letter seen by Reuters and reported by Iranian state media.

Japan ramped up purchases of Iranian crude after the end of sanctions, buying an average 172,216 barrels per day (bpd) in 2017, or around 5 million barrels a month. Brent crude stood at $79.42 a barrel, while U.S. benchmark crude was at $74.15.

In addition, Libya's output has fluctuated as groups fighting one another disrupt supplies. The rupee touched a record high of Rs 69.09 versus dollar last week. Rising geopolitical tensions is putting pressure on oil. The Trump administration indicated that the White House would look to sanction countries that don't reduce their imports of Iranian crude to "zero" by November. 4.

Trump implied on Twitter that he had asked the king in a phone call to increase oil production in hopes of greater supply bringing costs down in the USA, writing 'Prices [are too] high!'

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