Oil price jumps on supply issues

Donald Trump

Yet President Donald Trump's social media posts on Saturday helped unsettle the market when he tweeted that Saudi Arabia had agreed to pump more oil, "maybe up to 2,000,000 barrels", the tweet read, presumably meaning barrels a day.

The White House later backtracked on the president's tweet, while Saudi Arabia did not confirm Trump's comments.

Iran's OPEC governor, Hossein Kazempour Ardebili, accused the United States and Saudi Arabia of trying to push up oil prices and said both countries are acting against the foundation of OPEC. This increase is needed to cope with the "turmoil and dysfunction in Iran and Venezuela", Trump tweeted.

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. There have been supply outages in Venezuela, Libya, Canada, Angola, Iran, and Kazakhstan, according to the trade publication Oil Price.

Meanwhile, US crude oil production has soared by 30 percent in the last two years, to 10.9 million bpd.

Traders in Asia are trying to gauge which way it will go when state-owned Saudi Arabian Oil Co., known as Saudi Aramco, publishes monthly official selling prices this week. That is likely to help Saudi Arabia in deciding to follow Trump's lead.

President Rouhani also reaffirmed his country's stance on Iran nuclear deal known as JCPOA after United States withdrawal, saying that Tehran would stay in the deal as long as its interests are preserved.

Crude oil prices rose on Tuesday with the USA benchmark hitting a four-year high on expected drains in domestic inventories and outages in Libya.

"With Trump not backing off on Iran sanctions, lot of geopolitical risk is there on crude oil and 1mpbd of Iranian crude oil production could be lost to the market. It all kicked off at the weekend with Trump claiming the Saudis had agreed to an extra 2m barrels a day which is physically impossible, they just can't do that", he said. "While Saudi Arabia has the capacity, in theory, it takes time and money to bring these barrels online, possibly up to one year", Chief Oil Analyst of Energy Aspects Amrita Sen said.

On the other hand, the International Monetary Fund (IMF) praised the positive economic reforms that Saudi Arabia has been working on while stressing that the implementation of some initiatives aimed at increasing non-oil revenues is a significant achievement.

USA crude stockpiles are forecast to have declined 5 million barrels last week, according to a Bloomberg survey ahead of government data to be released on Thursday.

"As Libyan port closures remove about three-quarters of their 1 million barrel-per-day exports, crude is pushing higher again today", he said. The latter have soared in the last two years to around 400,000 barrels per day in July, worth around $1 billion at current market prices.

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