Trump declares oil prices too high, blames OPEC

Lloyd Doyle
June 14, 2018

US production of oil came in at 10.9 million barrels per day last week, according to data released Wednesday by the US Energy Information Administration, up almost 17 percent from the year-ago level. The American Petroleum Institute, an industry group, said late Tuesday that oil stockpiles rose by 830,000 barrels last week. Russia's production was 11.1 million barrels a day in June, exceeding its quota, according to sources familiar with the matter.

Crude has more than doubled since bottoming out below $30 a barrel in early 2016, causing US motorists to face the highest gasoline prices since late 2014.

Some estimates put the post-crash reduction in investment by major oil companies such as Exxon Mobil, Chevron and BP at more than $1 trillion. BP (BP) dipped 0.2%, and Royal Dutch Shell (RDSA) lost 0.5%.

Early on Wednesday, President Trump tweeted: "Oil prices are too high, OPEC is at it again". OPEC members include Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

For 2019, IEA's estimate of demand anticipates growth of 1.4 million barrels of oil per day, amid a boost from the petrochemicals sector, where some projects are coming on stream earlier than previously thought.

To make up for the losses, the IEA estimated that Middle East Opec countries could increase production in fairly short order by about 1.1 million bpd. Prices last month were further boosted to the highest level since 2014 after a US decision to reimpose sanctions on Iran threatened to curb exports from the Islamic Republic and as economic turmoil in Venezuela hurt the Latin American nation's output. "It is possible that the very small number of countries with spare capacity beyond what can be activated quickly will have to go the extra mile", the IEA said.


OPEC and various non-OPEC oil producers are set to convene in Vienna later in the month to discuss future production.

"Glad you noticed. We wrote you last month asking for action", Schumer said, including a copy of a letter in which he and three other Democratic senators called on Trump "to use all of your authority" to pressure OPEC to increase world oil supplies.

OPEC itself spotlighted USA output in its own monthly report on Tuesday, citing the growth of non-OPEC supply as one of several question marks hanging over the situation.

But the US request and a Trump tweet in April that blamed OPEC for high oil prices has caused a split within the oil group, with some members accusing Saudi Arabia of being too eager to do Trump's bidding.

"Statements by several parties suggest that action in terms of higher supply could be on the way", said the IEA, which represents the USA and other oil-consuming nations.

Other reports by Iphone Fresh

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