Trade concerns, OPEC issues push oil prices lower

Trade concerns, OPEC issues push oil prices lower

U.S. President Donald Trump pulled out of that nuclear deal last month and announced the "highest level" of sanctions against Iran, the biggest producer in the Organization of the Petroleum Exporting Countries after Saudi Arabia and Iraq.

"Increases in USA production will not be able to fully offset the drop from Venezuela and Iran", said Bruce Xue, oil analyst with Haitong Futures.

Riyadh, Tehran's arch rival, has always been a close Washington ally, but direct pressure on a member of Organization of the Petroleum Exporting Countries (OPEC) over oil policies is rare. "The U.S. tried it last time against Iran, but oil prices got to $140 a barrel".

OPEC, and Saudi Arabia specifically, have assured in recent weeks that they would address "consumer and market anxiety" if need be, as gasoline prices around the world reached their highest in four years.

Oil prices rose on Thursday to shake off some of the previous session's losses, supported by plunging exports by OPEC-member Venezuela. The producers have been considering a supply increase of up to 1 million barrels per day, sources told Reuters. The agreement began to be applied in January 2017 and will be valid until the end of this year.

"It's a tug of war between the loss of supply from Venezuela and Iran and the potential output increase from OPEC and USA shale", said Tony Nunan, risk manager at Mitsubishi Corp.

As speculation swirls over whether Opec and its allies will relax the caps at a meeting in Vienna later this month, Goldman Sachs Group Inc is still bullish on oil as it says stockpiles will continue to diminish this year.

Since the original worldwide sanctions were lifted in January 2016, Iran has struggled to raise production above 4 million barrels per day.

OPEC will meet in Vienna on June 22 to decide whether the group and non-OPEC producers, including Russian Federation, should raise output to make up for any supply shortfall from Iran and Venezuela.

The company is raising pricing to Asia as competing barrels from fellow OPEC producers Venezuela and Iran have dwindled from that market or are expected to become more scarce in coming months.

This comment followed an unofficial request from the United States asking OPEC's de-facto leader Saudi Arabia to boost output.

U.S. reliance on Saudi crude imports has decreased in recent years, in part as domestic shale output has risen, but Saudi Arabia remains an important source of U.S. supply. That compared with 9.6 million bpd in April.

The US call for more oil comes despite its own record-setting production.

According to the Iranian official, OPEC will not accept the USA request because "OPEC will not accept such a humiliation". PVM Oil Associates strategist Tamas Varga said, Reuters reported. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High!