Oil falls as Saudi output rises to compensate for disruptions

West Texas Intermediate, the USA benchmark for the price of oil, was up 1.51 percent to $75.06 per barrel, its highest level since November 2014. It touched a low of $72.51. After leading the Organization of Petroleum Exporting Countries and its allies to cut production at the start of previous year, the kingdom has seen its hold on the world’s top oil consuming region reduced as rivals from the U.S.to Iran boost exports.

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Brent for September settlement advanced $1.05 to $78.35 a barrel on the London-based ICE Futures Europe exchange.

The Trump administration has been counting on Saudi Arabia and other OPEC members to supply enough oil to offset the lost Iranian exports and prevent oil prices from rising sharply.

In response to the recent comments, Robbie Diamond, SAFE’s CEO and President, said in a statement: “Asking the cartel to increase output is like trying to put a Band-Aid on a broken system that shouldn’t even exist in the first place. People are firming up their numbers of how much Iranian oil exports will be lost, and how much OPEC will increase”.

In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase oil output by up to 2 million barrels, an assertion the White House rowed back on in a subsequent statement. USA oil prices jumped 8 percent last week.

Earlier, the Saudi and Russian energy ministers reiterated their 1 million-barrel-per-day output increase agreement reached last month in Vienna, following Mr Trump’s tweet over the weekend that he’d received assurances from the Middle Eastern nation that it could increase production by double that volume. Despite President Trump nudging Saudi Arabia to boost production, it did little to tamp down the price of oil the past few days. Analysts had expected a 4.4 million barrel drawdown.

The letter, published by the Iranian Oil Ministry’s SHANA news agency, did not directly name Saudi Arabia, Iran’s Mideast rival, but the ultraconservative kingdom was clearly its target.

The United States would work with allies on a case-by-case basis but Washington did not plan to offer exemptions from sanctions, Hook added.

The US State Department has spelled out a campaign of “maximum economic and diplomatic pressure” to drive Iran towards negotiating a “better” deal to replace the Iran nuclear deal.

“The OPEC Monopoly must remember that gas prices are up & they are doing little to help”, Trump wrote on his personal Twitter account.

“Roughly 30 percent of all seaborne oil is transported through this strait every day”, Commerzbank said in a note.

NAN reports that on Twitter, Trump called on OPEC countries, fresh from a meeting in which they made a decision to raise oil output by an indeterminate amount, to do more to bring down crude prices.

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Kelty said: “I think it will trade in the $70 to $80 range but it will be very volatile”.

Iran to allow private sector to export oil, beat US sanctions