Published: Wed, June 13, 2018
Business | By Kate Woods

Trump declares oil prices too high, blames OPEC


Pumped further by global trade war fears, oil prices have since surged to multi-year highs, only to then fall back again somewhat, the IEA said.

"Prices are unlikely to increase as sharply as they did from mid-2017 onwards and thus the dampening effect on demand will be reduced", the IEA said in its latest monthly report.

Even if the supply gap, triggered by the return of U.S. 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.

Since early in 2017, however, OPEC has coordinated with Russian Federation, another oil-exporting country that is not an OPEC member, to try to regulate global supplies. Brent crude was trading at $75.83 per barrel, while the US WTI was valued at $66.31.

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The U.S. move has put pressure on European and Asian clients to stop importing Iranian oil or doing business with the country.

Opec producers and non-Opec countries struck a deal in 2016 to trim production by 1.8 million barrels per day to reduce a global glut of oil. Crude inventories fell by 4.1 million barrels in the week to June 8, exceeding analysts' expectations for a decrease of 2.7 million barrels.

Saudi Arabia, the biggest producer, raised its production by 85,500 bpd to 9.987 million bpd, according to OPEC's secondary sources. "Put the exports of crude on top of that, and it's just a really bullish report".

Saudi Arabia last month signaled it was ready to boost output in the second half of the year to ease consumer anxiety about higher prices, a policy U-turn for the kingdom that only weeks earlier advocated for production restraint.

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OPEC will meet on June 22-23 to discuss the potential of reducing its output cuts now that the market is more in balance.

But the International Energy Agency said it believes the prices are unlikely to rise as sharply as they have in the past few months, CNBC reported.

Rising oil output by the world's third biggest producer, the United States, is also affecting prices.

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

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