What Is OPEC? Trump Attacks Oil Price 'Monopoly'

Oil prices chart new territory on supply-side concerns

Oil prices chart new territory on supply-side concerns

Earlier in the day, Iranian President Hassan Rouhani lashed out at American officials for threatening to stop Iran's oil exports, saying they would never be able to carry out such a threat.

Trump has repeatedly called on the oil cartel to reduce prices.

Saudi Arabia's state-run oil giant cut its prices Thursday for first time since February after President Donald Trump lashed out at the OPEC cartel of oil producers over rising U.S. gas prices.

The rise in benchmark USA crude prices from a low of less than $30 a barrel in February 2016 to more than $70 in July 2018 has boosted the economies of Texas, Oklahoma, North Dakota and other producing states.

The world's biggest crude exporter is preparing to ramp up oil production, possibly by as much as 2 million barrels a day, amid United States sanctions on Iran.

If Gulf countries do not increase oil outputs to cover the shortfall left by Iran, America may not defend them, US President Donald Trump has warned in a tweet. USA crude futures were up 32 cents at $74.46, within sight of Tuesday's 3-1/2-year high above $75. In late morning trading, the price of the global benchmark Brent grade of crude oil was little changed at $77.85 a barrel.

The price of West Texas Intermediate crude oil is now around $74 a barrel. That may reduce the pressure on Saudi Arabia to keep oil prices high, said John Kilduff, partner at energy hedge fund Again Capital LLC in NY.

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Iran's OPEC Governor Hossein Kazempour Ardebili told the state-run Shana news agency Trump's policy on Iranian oil is "a kind of self-harm".

"You are hammering on good guys in OPEC".

"With those continued drawdowns at Cushing, we were approaching a situation where you could soon start to consider us nearing a shortage", Kilduff said.

Iran has threatened to block oil exports through a key Gulf waterway in retaliation against any hostile United States action.

Brent for September settlement advanced 46 cents to end the session at US$77.76 a barrel on the London-based ICE Futures Europe exchange.

A blockade of the strait, through which roughly 30 percent of all seaborne oil travels, would have "dramatic consequences for global oil supply and an impact on prices that is nearly impossible to put into figures", Commerzbank said in a note. But the tougher US approach now makes the bank's analysts think that Iran's exports to Europe, Japan, and South Korea-a total of 1 million bpd-would "fall to minimal levels".

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