Published: Sat, July 07, 2018
Business | By Eloise Houston

Trump's tweets driving up oil prices

Trump's tweets driving up oil prices

While Saudi Arabia is facing mounting pressure from Trump to do more, America's oil sanctions on Iran and trade frictions with China are adding to uncertainties with planned United States tariffs on Chinese goods set to start tomorow.

Even though the press he gets is usually negative, there's no denying USA president Donald Trump's effortless ability to garner attention, especially when he tweets; and his latest on-line demands for the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil prices has caused Iran to launch a counter-offensive by declaring that his intention to stop Iranian exports will merely hurt his own economy. "The news of their commitment to ramp production quickly enough along with some evidence that Saudi Arabia is ramping production is giving the market some pause".

President Donald Trump used Twitter on Wednesday (July 4) to express his frustration with high U.S.

"This must be a two way street", he wrote, adding in block capitals, "REDUCE PRICING NOW!"

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $74.60 a barrel at 0044 GMT, up 46 cents, or 0.6 percent, from their last settlement.

And consequently, Fourth of July gasoline prices notched a four-year high, according to fuel-finding-app GasBuddy. Even if Europe tries to convince Trump to change his mind, the USA wish to impose a more effective agreement with Iran remains. The so-called "NOPEC Act" would make OPEC subject to antitrust law, allowing the U.S.to go after OPEC for manipulating the oil market. Despite a positive nod from Saudi Arabia and Russian Federation for higher production, the backdrop of poor output from Libya and Canada prompted supply scarcity. Iran's OPEC governor Hossein Kazempour Ardebili said in a statement.

The Kuwaiti professor, Abdullah AlShayji tweeted a couple of old tweets were posted by Trump back in 2012 while attacking former President Barack Obama over the increase in oil prices that took place that time.

Mounting worldwide isolation in Venezuela, one of the founding members of OPEC, as well as USA sanctions pressure has pushed its oil production to historic lows. It has made similar threats in the past, prior to the 2015 nuclear deal.

Prices have risen as a result of Washington's plans to reimpose sanctions against Iran, OPEC's No. 3 producer, analysts said.

Recent price rises have also been spurred by a U.S. announcement that it plans to re-introduce sanctions against Iran from November, which will also target its oil industry.

Analysis from Swiss investment bank UBS said spare capacity, the amount of extra oil a producer could put on the market in short order, was approachinga 10-year low. The U.S.is hoping to take 2.5 mb/d of Iranian exports offline, which is about as much as the theoretical spare capacity that Saudi Arabia has left.

Oil prices dropped yesterday, falling 97 cents to $73.17.

"Iran is not in a position to be warning the United States about anything", she added. Iran had opposed the move, partially in protest of sanctions from the Trump Administration.

Libya halted operations at oil ports last week because of national security issues.

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