Published: Mon, July 09, 2018
Business | By Pearl Harrison

Volatile oil prices keep gas prices moving in both directions

Volatile oil prices keep gas prices moving in both directions

President Trump has also been busy tweeting his irritation at OPEC, saying the cartel is not doing enough to keep oil prices in check. The president said the USA defends many OPEC member states, insinuating that as a returned favor, these nations should cave to Washington's demands.

"This must be a two way street", his latest statement read.

Following Trump's OPEC complaint, Saudi Arabia, the biggest crude oil exporter, assured Trump they could increase oil production and ensure price stability in the global market, according to Reuters.

He said Trump had in fact made the USA a hostage to Russian Federation and Saudi Arabia as a result of his campaign to undermine Iran's oil exports, stressing that the United States president should have expected this when he moved to block Iran's access to global markets.

Opec together with a group of non-OPEC producers led by Russian Federation started to withhold output in 2017 to prop up the market. "REDUCE PRICING NOW!" Trump tweeted. But U.S. allies aren't on board with Trump's planned sanctions on Iran.

West Texas Intermediate crude for August delivery traded at $73.86 a barrel on the New York Mercantile Exchange, down 28 cents, at 3:01 pm in Singapore.

Brent for September settlement was little changed at $77.78 a barrel on the London-based ICE Futures Europe exchange, and traded at a $6.53 premium to WTI for the same month.

In May, the US retreated from a multilateral deal with Iran regarding its nuclear disarmament program, and imposed sanctions to limit the world's fourth largest oil exporter's access to global markets.

Kazempour said that Trump is mistakenly attacking some of the "good guys" who are working to boost their output to compensate for Iran, Venezuela and Libya.

US and Saudi objectives are not fully aligned, however, on oil prices.

Writing on Twitter Wednesday, the US President said OPEC is doing little to help. "Their companies - their companies will be subject to the same sanctions that everybody else's are if they engage in those sectors of the economy that are sanctionable, where there were sanctions imposed prior to 2015", the unnamed U.S. State Department Official told the media on June 26.

However, the Chinese government has not yet specified a date on which it may introduce duties on imports of USA crude.

Unlike the situations with other presidents, however, Trump is directly linked to the current increases because of his push to block purchases of Iranian oil.

Despite these measures, Goldman Sachs said in a July 4 note to clients that "the market will remain in deficit" in the second half of the year. That means there's a shrinking buffer to protect against the shocks like the eventual loss of Iranian oil or a hurricane in the U.S. Gulf of Mexico.

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