Libya force majeure on oil exports make prices skyrocket

Jul 08, 2018, 01:37
Libya force majeure on oil exports make prices skyrocket

Oil prices fell on Thursday after U.S. President Donald Trump sent a strident tweet demanding that OPEC cut prices for crude.

United States president, Trump in a series of tweets, is reported to have called for Saudi officials, which represent the most influential oil producer in OPEC, to help pump more crude and lower prices.

The leader of Saudi Arabia, OPEC's biggest member, has assured Trump that the kingdom can raise oil production if needed, and that the country has 2 million barrels per day of spare capacity that could be deployed to help cool oil prices to compensate for falling output in Venezuela and Iran.

U.S. West Texas Intermediate (WTI) crude futures were at $74.60 a barrel at 0044 GMT, up 46 cents, or 0.6 percent, from their last settlement.

US crude slipped 2 cents to $72.92.

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The recent strength in oil prices has in part been spurred by a USA announcement that it plans to reintroduce sanctions against Iran, OPEC's third-largest producer, from November, targeting oil exports.

"The responsibility of paying unnecessary prices for oil by all consumers of the whole world, especially in USA gas stations, is exclusively upon your (Trump's) shoulders and the price of over $100 per barrel is yet to come", Kazempour said.

"This must be a two way street", he wrote, adding in block capitals, "REDUCE PRICING NOW!"

"With contentious midterm United States elections looming, the President continues to strong-arm Saudi Arabia to increase oil supplies which, at least for now, is containing price action below WTI $75 per barrel", said Stephen Innes, Head of Trading for Asia/Pacific at futures brokerage OANDA.

OPEC together with a group of non-OPEC producers led by Russian Federation started to withhold output in 2017 to prop up the market.

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Renewed U.S. sanctions on Iranian oil appear set to tighten supplies further.

Saudi Arabia's objective, revealed at the OPEC meeting in June, has been to stabilise production and prices around current levels.

OPEC together with a group of non-OPEC producers led by Russian Federation started to withhold output totaling 1.8 million barrels per day (MMBPD) in January 2017, to prop up the market.

US tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday and Beijing has vowed to respond in kind.

Prices have risen as a result of Washington's plans to reimpose sanctions against Iran, Opec's No. 3 producer, analysts said.

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US crude stockpiles rose 1.3 million barrels last week, according to US Energy Information Administration data.

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