U.S. President Donald Trump on Thursday called for the Organisation of the Petroleum Exporting Countries (OPEC) to boost oil production to lower the price of the commodity. “Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!” Trump wrote in a post on Twitter.
Immediately following Trump’s tweet, U.S. crude oil futures fell by more than $1 to $58.33 a barrel and Brent futures were down by more than $1 to a session low of $66.76 per barrel. The drop in oil prices extended losses into a second consecutive session, following a surprise build in U.S. crude inventories. International Brent crude oil futures were at $67.56 a barrel down 27 cents, or 0.4 per cent, from their last close. Brent closed down 0.2 per cent on Wednesday. U.S. West Texas Intermediate (WTI) crude futures were at $59.09 per barrel, down 32 cents, or 0.5 per cent, from their last settlement. WTI fell 0.9 per cent on Wednesday.
Prices came under pressure from a rise in U.S. inventories, although analysts pointed to support from efforts by the Organisation of the Petroleum Exporting Countries (OPEC) and non-affiliated allies like Russia, known as OPEC+, to trim output. “Today’s fall does not derail the short-term bullish argument that both the OPEC+ production cuts and supply outages will outweigh the global growth concerns and rising U.S. production,’’ said Edward Moya, senior market analyst, OANDA.
U.S. crude inventories rose last week by 2.8 million barrels, compared with analysts’ expectations for a decrease of 1.2 million barrels, the U.S. Energy Information Administration said.
Crude exports fell by 506,000 barrels per day, the EIA said. Offering support for prices, oil output from Russia, OPEC’s biggest non-member ally, averaged 11.3 million barrels per day so far in March, a source said, compared with 11.34 million barrels a day the previous month.
Crude oil prices have risen this year amid supply cuts by OPEC as well as U.S. sanctions on OPEC member countries Venezuela and Iran. The drop in production has led to a tightening of oil inventories. But analysts have warned oil prices would be higher by now if not for a spreading economic slowdown expected to soon start hitting fuel consumption. (Reporting by Makini Brice; Editing by Doina Chiacu and Jeffrey Benkoe)
