Oil dips after surprise crude storage increase in the US

07 July, 2018, 04:33 | Author: Gerard Cortez
  • India’s oil imports from Iran surged after US sanctions were lifted in 2015

On July 4, Trump tweeted, "The OPEC Monopoly must remember that gas prices are up & they are doing little to help".

Ship brokerage Banchero Costa said Iran's crude oil production was now around 3.8 million barrels per day (bpd), but added "there is the risk of production decreasing going forward as exports are again affected by renewed sanctions implemented by the United States".

It is now trying to negotiate a waiver from the US sanctions, but judging by the State Department's stated goal to reduce Iran's crude oil exports to zero, success is uncertain.

In response to Trump's remarks, Iran's OPEC representative urged the president to "please stop" tweeting about lower oil prices, according to a Reuters report.

Recent price rises have also been spurred by a USA announcement that it plans to re-introduce sanctions against Iran from November, targeting oil exports.

Top exporter Saudi Arabia told OPEC it had raised oil output by nearly 500,000 barrels per day last month, OPEC sources said, a sign Riyadh wants to make up for shortages elsewhere and dampen prices.

Oil was trading at over $78 per barrel of the Brent benchmark on Thursday, while US West Texas Intermediate was trading at $74.55.

Trump took aim at OPEC for not doing enough to offset the supply disruptions and keep down the oil prices, which have risen to their highest mark in more than three years.

US tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday and Beijing has vowed to respond immediately in kind, setting the two world's biggest economies on a path toward a full-blown trade conflict.

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US President Donald Trump's nuclear reaction is threatening to turn off the taps of the world's major oil supply.

"We're seeing a bounce to the upside thanks to spillover from a really good jobs number and strength in equity markets, as well as a draw in Cushing stocks", said Jim Ritterbusch, president of Ritterbusch and Associates.

"With those continued drawdowns at Cushing, we were approaching a situation where you could soon start to consider us nearing a shortage", Kilduff said.

Volatility in the Middle East and USA foreign policy can have a major impact on oil prices.

In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase oil output by up to 2 million barrels, an assertion the White House rowed back on in a subsequent statement. "Their companies - their companies will be subject to the same sanctions that everybody else's are if they engage in those sectors of the economy that are sanctionable, where there were sanctions imposed prior to 2015", the unnamed U.S. State Department Official told the media on June 26.

The U.S. government plans to shut Iran's oil exports out of the market from November, demanding that all countries stop buying its oil.

An imminent shift in global oil trade flows was also affecting prices.

If that happens, "Chinese demand would then shift to other suppliers".

The UAE's Abu Dhabi National Oil Co (ADNOC) said on Tuesday it could increase production by several hundred thousand bpd if needed.

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