Saudis, Russia to Talk Output Boost Ahead of OPEC Summit

Lloyd Doyle
June 15, 2018

Amid today's high prices, Riyadh and Moscow have said they think the time has come to.

But it's more complicated than that. That move took USA crude from about $50 a barrel in late 2016 to more than $70 in 2018.

"Prices will be above $150 in less than two years", he tweeted on Wednesday.

After Trump tweeted his unhappiness with the price of oil in April, the price of oil fell.

A flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen before a news conference at OPEC's headquarters in Vienna, Austria, December 10, 2016.

The ideas, discussed informally among ministers and delegates ahead of next week's meeting in Vienna, comes as Riyadh tries to rally support for a production increase in the face of staunch opposition from Iran, Venezuela and Iraq, and pressure from Washington, the same people said, asking not to be named discussing private conversations. They have shown discipline in limiting production since the start of past year, helping push up the benchmark price of worldwide crude.

"You can not place sanctions on two OPEC founder members and still blame OPEC for oil price volatility", he said, referring to his country and Venezuela. Flynn compared that to eliminating the fourth-largest oil producer in the world.

Even if the supply gap, triggered by the return of United States sanctions on Iran and a major political crisis in Venezuela, is plugged, the oil market will likely remain vulnerable to disruption next year, the IEA warned. Most analysts expect production there to go even lower. Unity within OPEC has been strained, as some members such as Iran have pumped greater supply into the market.

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.

USA companies have filled some of the gap created by Venezuela, OPEC and non-OPEC producers including Russian Federation. Saudi Arabia has already started pumping more crude. "Not good!" Trump wrote in a post on Twitter on Wednesday after last raising the issue in April.

OPEC is under scrutiny in Congress, too. U.S. crude traded Wednesday near $67 a barrel. Bob Goodlatte, R-Va., said shielding a cartel like OPEC "makes a mockery of USA antitrust law, threatens the American economy and has the potential to harm our national security".

Jason Bordoff, a Columbia University professor and former energy adviser to President Barack Obama, said politicians always fret when gasoline prices rise before a big election.

The measure would have to pass the full House and the US Senate before Trump could sign it into law. "The real catalyst for the recent rise in prices is the sanctions on Iran".

Other reports by Iphone Fresh

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