Trump Declares Oil Prices 'Too High,' Blames OPEC

Mae Love
June 16, 2018

The 14 oil-producing nations in OPEC - Saudi Arabia, Iran, Iraq, Kuwait and Venezuela among them - produce about 40 percent of the world's oil, but about 60 percent of the oil traded on global markets.

OPEC ministers meet June 22 for a regular meeting to consider what happens next with their effort to stabilize the market.

But there is division within OPEC, with some states favoring an increase in production and supply while others want to restrict it further.

"Even in a "go it alone" scenario, we think the initial production increase will be modest - and aimed at reducing the high level of over-compliance with the 1.8 million b/d target - as no one wants to cause another collapse in oil prices", she said.

The US hasn't asked Opec to bolster supplies, United Arab Emirates Oil Minister Suhail Al Mazrouei - who this year holds Opec's rotating presidency - told CNN.

The oil supply deal is set to continue through the end of 2018, but plans for its continuation were unclear for next year.

The potential collaboration between the two major oil buyers would present another challenge for Opec, which is facing competition for market share in Asia from the flood of crude pumped in the Gulf of Mexico and shale fields of Texas. OPEC output was last lower in April 2017 at 31.85 million b/d, the last month before West African producer Equatorial Guinea became its newest member.

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According to the monthly report released on Tuesday, OPEC oil production increased by 35,000 barrels a day in May, month-on-month, to average 31.87 million barrels a day. ING sees a possible expansion in the group's supply of between 800,000 and 1 MMbpd this year.

OPEC and its Russia-led non-OPEC allies are up for a very heated meeting next week, but it looks like the leaders of the two groups-Saudi Arabia and Russia-believe that they will persuade dissenters to agree to some sort of a production boost. "Not good!" Trump wrote in his post on Twitter after last raising the issue in April.

Rising US stocks partly reflect a surge in US crude production, which has jumped by nearly a third in the last two years to a record 10.8 million barrels per day. This would make it harder to respond to a supply shock, such as out of Venezuela, where output has declined to a 33-year-low due to an economic crisis. The EIA and the IEA are trying to "instigate the increase in production of OPEC", Kazempour said.

The price index for all consumer items for the 12 months ending in May increased 2.8 percent.

Official US production and inventory data is due to be published on Wednesday by the Energy Information Administration.

Trump's latest tweet on OPEC came shortly after he returned to the White House from a summit in Singapore with North Korean leader Kim Jong Un.

China's Ministry of Commerce didn't immediately reply to a fax seeking comment.

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