Trump says OPEC 'monopoly' must get prices down

Trump says OPEC 'monopoly' must get prices down

Trump says OPEC 'monopoly' must get prices down

On Thursday, Trump linked American support for Middle Eastern countries to oil prices as he again urged OPEC to lower prices.

The U.S. Energy Information Administration (EIA) reported significant draws in U.S. crude oil and gasoline inventories during last week, and both major benchmarks of crude oil increased on Wednesday.

In actuality, this is largely a demand-fueled price increase that is due to robust USA and global economic growth, said Pat McKinnon, senior director at Euler Hermes North America.

In the range-bound market, Trump's tweets may drive prices down slightly, said Tyche's Zahir, predicting that such tweets would probably continue with USA midterm elections approaching.

And just as inevitably, oil prices pulled back slightly as the brash billionaire tweeted his displeasure on Thursday: Brent settled down 78 cents at $78.70 per barrel, while West Texas Intermediate settled down 32 cents at $70.80 per barrel - after rising almost 2 percent in the previous session.

Brent crude oil LCOc1 settled down 78 cents at $78.70 a barrel. Trump sent several tweets stating that prices are too high after Brent rose to a three-year high in May.

Saudi Arabia has markedly increased oil exports to America, a sign OPEC's leading producer is responding to pressure from Trump.

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Jason Gammel, analyst at USA bank Jefferies, said he expects Saudi Arabia to try to keep the oil market adequately supplied into 2019, "but at the cost of spare capacity", a key supply buffer to prevent oil price volatility.

Crude inventories fell by 2.1 million barrels in the last week, compared with analysts' expectations for an decrease of 2.7 million barrels. But it is unclear how easily other producers can compensate for any lost supply.

"It's complicated. Saudi Arabia has to balance oil supply and demand, and it has to balance oil prices so they don't rise too much before the USA elections", one OPEC source told Reuters.

OPEC sources have told Reuters no immediate action was planned and producers would discuss how to share a previously agreed output increase.

Trump's tweet comes about two months after a similar tweet in July, in which he also called OPEC a monopoly and tacitly threatened to withdraw United States support. US light crude oil was 40 cents higher at $71.52 after rising almost 2 percent on Wednesday.

Petrol consumption usually picks up in the summer and wanes in autumn, but demand remained strong in the latest week, estimated at 9.5 million barrels per day.

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