Abu Dhabi Ready to Pump More Oil Under OPEC Deal

Japanese Prime Minister Shinzo Abe left shakes hands with Iranian President Hassan Rouhani

Japanese Prime Minister Shinzo Abe left shakes hands with Iranian President Hassan Rouhani

The move coincides with United States plans to reimpose economic sanctions on OPEC member Iran, including halting oil exports. "It is a real blow to OPEC, in part because of the impression the Saudis are following U.S. bidding, but mostly because Saudi Arabia and Russian Federation had stitched up a deal to raise production anyway even before the meeting".

The US ultimatum has also contributed to upward pressure on world oil prices, although Trump believes he has persuaded Saudi Arabia to offset this by ramping up its own production.

U.S. crude stockpiles rose 1.3 million barrels last week, according to data from the U.S. Energy Information Administration, against analysts' expectations of a 3.5 million-barrel decline.

"They seek to push Iranian exports of crude, condensate, and oil products to zero", energy consultancy FGE said in a note.

"Your tweets have increased the prices by at least $10", Kazempour Ardebili said of Trump, according to news outlet SHANA.

"The 'OPEC+' agreement fell short of what was expected to render a bearish signal to the market", Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London, said in an email. While June saw Iran export over two million BPD, we could see a massive shock to the crude market if the U.S. manages to reduce exports to zero by 4 November.

Federal Government has also said that it needed oil to sell at $138 per barrel to be able to balance its budget as it also projected N1.95 trillion deficit in the budget.

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Oil prices rose on Friday on worries that USA sanctions against Iran would take away significant volumes of crude oil from world markets while oil demand worldwide increases.

Trump's suggestion means he wants Riyadh to increase production to 12 million bpd - something the kingdom has never done in the past.

"A fall in the price per barrel won't serve the interests of the big oil producers", Kaddour stressed.

US President Donald Trump's tweets about the Organization of Petroleum Exporting Countries (Opec) and oil prices are more likely to worry the market and put upward pressure on prices than reassure it. But those moves may be tempered by an equal desire by the United States and other country for stable oil prices. Now global oil prices have recovered to 2014 levels, OPEC has agreed to relax curbs and Saudi Arabia must decide whether market share is more important than price.

A similar situation occurred last month with two other ports and the National Oil Company has confirmed that the blockages are cutting oil production by 850,000 barrels per day, further tightening global supply. He said he expects European countries to unveil a package of measures in the coming days created to keep the deal alive.

Over the weekend, President Donald Trump tweeted that Saudi Arabia agreed to increase crude oil production by 2 million barrels per day (Mbd) to cool high oil prices and make up for supply shortfalls due to current outages in Venezuela and future supply losses in Iran.

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