Trump renews attack on OPEC ahead of group's production meeting

Trump renews attack on OPEC ahead of group's production meeting

Washington: US President Donald Trump on Wednesday accused the Organization of Petroleum Exporting Countries of driving up oil prices, in a fresh swipe at the cartel´s agreement to cap production.

A US decision to pull out from an worldwide nuclear deal with Iran and reimpose sanctions helped prices climb to their highest since 2014. They started output cuts in 2017 to prop up prices that had been dragged down by a supply glut.

The development has come at a time when even the United States has expressed its unease over Opec's attempts to keep oil prices high by capping its production.

"OPEC's policy will more than likely change come 22 June, 18 months of hard graft and quite frankly, astounding compliance by all members has done its job and flat price is up at the dizzying heights of US$76 per barrel", said Dubai-based Matt Stanley, fuel oil broker, Freight Investor Service.

Iran's OPEC governor later told Reuters "You can not place sanctions on two OPEC founder members and still blame OPEC for oil price volatility", referring to itself and Venezuela.

For now, global oil demand growth is expected at 1.61 millions of barrels per day (mb/d) in the second half of the year, with total oil demand projected to breach the 100 mb/d level. "There is going to be a real issue", he wrote, predicting prices above $150 per barrel within two years.

Moscow believes the new arrangement it proposes would provide stability for the oil market through a period of high demand during the northern hemisphere summer, the person said.




The country boosted production after the USA lifted sanctions related to Iran's nuclear program in 2016, but analysts expect output to fall when the Trump administration's decision to withdraw from the deal takes full effect later this year.

Production fell in Nigeria, Libya and Venezuela, but increased in Saudi Arabia, Algeria and Iraq.

Early in the year, with gas prices at service stations still relatively low, Trump suggested raising the country's gasoline tax that customers pay at service stations by 25 cents a gallon to fund road and highway repairs.

The IEA meanwhile warned that whatever the outcome of the meeting, "the market will be finely balanced next year, and vulnerable to prices rising higher in the event of further disruption".

Russian Energy Minister Alexander Novak said members of the OPEC-plus production cut deal can consider returning up to 1.5 million bpd to the market gradually. Other than the US, India, and China are the largest sources of demand growth in 2018, according to OPEC's monthly report.

OPEC kingpin Saudi Arabia in January publicly floated the idea to extend the cooperation agreement which was struck by 24 OPEC and non-OPEC producers in late 2016 to trim output to shore up prices. Still, US output is now above that of top exporter Saudi Arabia, which currently churns out slightly above 10 million bpd.

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