Oil prices creep higher as OPEC wrestles with Trump’s call to boost production
GLOBAL oil prices rose on Thursday morning as the Organisation of the Petroleum Exporting Countries concluded a meeting in Algiers, where the group wrestled with pressure from President Donald Trump to pump more.
Benchmark Brent crude was up slightly at US$ 81 a barrel on London’s markets, while West Texas Intermediate was trading up at more than US$ 72 per barrel.
Brent hit a four-year high this week at US$ 80 per barrel. American drivers in recent months have felt the effect at the fuel pump, where prices have rise to a national average of around US$ 2.85 per gallon.
OPEC has come under attack from President Trump all year, and most recently this month, for limiting production which helped drive up oil prices.
JPMorgan in a report last weekend cited geopolitical risks, including the trade war with China, North American Free Trade Agreement negotiations and the chance of “a major miscalculation from sanctions” against Iran, that could push the price of oil toward US$ 90 a barrel.
“Sanctions seem to be biting earlier and more forcefully than originally anticipated,” said Frank Verrastro, an oil expert with the Centre for Strategic and International Studies.
The latest increase comes as a Reuters report said that Saudi Arabia, OPEC’s de facto leader, will temporarily pump 500,000 barrels per day more to ease tight supplies in the wake of American sanctions against Iran, which is a major supplier.
Despite that, Bob Tippee, editor of Oil & Gas Journal, said the president’s jawboning of OPEC leaders may not help much. “I don’t think the important OPEC producers - Saudi Arabia, Kuwait, Emirates - want to get in open conflict with Trump,” Tippee said. “They are going to do what’s in their economic interest. And that’s what they are doing.”
In a communique released after its meeting last weekend, OPEC “expressed its satisfaction regarding the current oil market outlook, with an overall healthy balance between supply and demand.” OPEC said in the communique that its leaders “expressed its satisfaction regarding the current oil market outlook, with an overall healthy balance between supply and demand.”