Trump slams OPEC as oil prices trade near $80 a barrel

Irving Hamilton
September 20, 2018

President Donald Trump on Thursday issued a fresh call on the OPEC oil cartel to lower crude prices, saying the United States was providing Middle Eastern energy giants with security.

The Organization of the Petroleum Exporting Countries and other producers, including Russian Federation, meet on Sunday in Algeria to discuss how to allocate supply increases to offset the loss of Iranian barrels.

His complaint follows signals from Saudi Arabia that it was content to see prices climb above $80 a barrel.

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!" he tweeted.

The Asian recovery in WTI (oil futures on NYMEX) got sold-off into the $ 70 barrier in the European morning, as markets turned cautious ahead of the weekly USA crude stockpiles report due to be published by the Energy Information Administration (EIA) later on Wednesday.

Brent crude futures were 0.6 percent lower in London, erasing an earlier gain of as much as 0.5 percent to trade at $78.92 a barrel at 1:07 p.m. local time.

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Observers will be watching the forthcoming OPEC meeting in Algiers for clues on oil production.

The president is returning to a playbook that's won him significant victories already this year. Rising U.S. gasoline prices could create a political headache for Trump before November congressional elections by offsetting Republican claims that his tax cuts and rollbacks of federal regulations have helped boost the U.S. economy.

Saudi Arabia is anxious that any sanctions-related spike in oil prices will trigger fresh criticism from Trump, but it also faces doubts over its ability to compensate for a drop in Iranian supply, the sources said.

Mr. Trump in May pulled the US out of a 2015 global agreement to curb Iran's nuclear program, setting the stage for the reimpositon of economic sanctions-and sending prices skyrocketing.

It is unclear how easily other producers, such as Saudi Arabia, Iraq and Russian Federation, can compensate for lost supply. It's unclear, however, whether the Saudis discussed prices with Russian and American officials.

But a late June decision by OPEC-de facto led by Saudi Arabia-and Russian Federation to begin ramping up production this summer after more than a year of holding back output helped to put a cap on crude's ascent. Earlier this month, Saudi shipments into the US reached a four-week average of 1 million barrels a day for the first time since late 2017, according to government data.

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