- Crude Oil retreats from highest marks in more than 3 years
Friday, US President Donald Trump accused OPEC of “artificially” boosting Crude Oil prices after a year-plus pact that has cut global crude inventories, drawing rebukes from Oil-producing countries as prices dipped following his remarks.
“Looks like OPEC is at it again,” President Trump wrote in a post on Twitter.
“With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”
It was unclear what triggered the Tweet
It is President Trump’s 1st mention of OPEC on social media during his term. It came shortly after Saudi Arabian officials said they remained far from their goal in reducing a 3-year global supply glut.
This week, Crude Oil prices rose to levels not seen since late Y 2014. OPEC is expected to restrain supply through the end of this year, and possibly into Y 2019.
Several members of the Organization of the Petroleum Exporting Countries responded to the Tweet, saying prices were not artificially inflated.
Delegates at an OPEC/non-OPEC monitoring committee meeting in Jeddah, Saudi Arabia said Crude Oil prices were higher partially because of global political tensions, mentioning sanctions on Venezuela, threats to the Iran nuclear agreement, strikes on Syria and saber-rattling over NKorea.
OPEC Secretary General Mohammed Barkindo said the output cut agreement halted the collapse in global oil prices, and is “on course to restore stability on a sustainable basis in the interest of producers, consumers and the global economy.”
“We do not have any price objective in OPEC, and not in this joint endeavor with non-OPEC,” Mr. Barkindo said Friday, in response to President Trump’s Tweet. “Price is not our objective. Our objective remains restoring stability… on a sustainable basis.”
The group is slated to meet in June to decide next steps after reducing output since January 2017 along with other producers, including Russia.
Trump gave no details on what action his administration might take regarding oil or OPEC, and the White House did not respond to requests for comment.
“We have a difficult time seeing how OPEC would in any way be swayed here in terms of changing course, in terms of policy,” said Michael Tran, commodity strategist at RBC.
OPEC’s output fell in March to an 11-month low, according to a Reuters survey. The cartel has targeted the five-year average of inventories in 35 Organization for Economic Cooperation and Development (OECD) countries as a barometer for the deal’s success.
Beyond OPEC’s supply management, crude prices have been supported by expectations that Washington will re-introduce sanctions on OPEC-member Iran, and might expand sanctions against Venezuela after that country’s presidential elections next month.
Have a terrific weekend.
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