Trump Blasts Saudi Arabia for Plan to Reduce Oil Production

Marcus Newton
November 13, 2018

He also said oil prices should be much lower based on supply.

Oil prices have staged a recovery, climbing above $70 a barrel after Saudi Arabia said the world's major crude producers agreed that supply needs to be significantly cut next year.

"One thing that is abundantly clear, OPEC is in for a shale shocker as US crude production increased to a record 11.6 million barrels per day and will cross the 12 million threshold next year", Oanda's head of trading for the Asia Pacific, Stephen Innes, told Reuters. Next month OPEC will meet and it is in this meeting we will get some from numbers of any supply cuts for 2019.

"His twitter comments and back channel pressure played a pivotal role in prompting Saudi Arabia and its key OPEC allies to open the taps", it says.

West Texas Intermediate for December delivery declined 26 cents to end the session at US$59.93 a barrel on the New York Mercantile Exchange. OPEC leaders made clear Trump's social media posts were the impetus for the production changes, which kept oil prices low ahead of both the midterm elections and Trump's expected move to reimpose sanctions on Iran.

Brent crude oil prices jumped 2 per cent on Monday after top exporter Saudi Arabia announced a supply cut in December, a measure likely aimed at halting a market slump that has seen crude decline by 20 per cent since early October.

On the USA oil chart price found a temporary bottom around the Daily S1 Pivot level.

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Saudi Arabia has been pumping 10.7 million bpd since October, Falih said.

Russian Federation stated on Sunday that it did not believe that the oil market would face a probability of an oversupply next year.

"In the short term, this is a positive for oil, but we must question the impact over the longer term unless it's the sign of more to come from OPEC", said Market Analyst Neil Wilson.

"We are going to do everything we can to keep inventories and supply-demand fundamentals within a reasonably narrow band around balance", he said. We need to steady the ship and steady the market further. "In contrast, if oil prices fall it will benefit the currencies of major oil-importing emerging markets including the Indian rupee and Turkish lira".

Besides, output from the Organization of the Petroleum Exporting Countries like Saudi Arabia, the UAE, Iraq and Libya has been on the rise in recent months.

The kingdom's energy minister, speaking after a meeting of Opec at the weekend, said the cartel believed that production would need to fall by almost 1m barrels per day (bpd) on October levels. The UAE now produces some 3 million barrels of oil a day.

Other reports by MaliBehiribAe

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