Trump, Iran spar over oil prices ahead of OPEC meeting

Trump, Iran spar over oil prices ahead of OPEC meeting

In what could bolster the much acclaimed idea of "Chindia", India and Asia - two of Asia's biggest buyers of crude oil - are contemplating of joining hands to counter the Organisation of the Petroleum Exporting Countries' (OPEC) dominance in the market and buy American supplies instead, a report in Bloomberg said.

In April, Trump also blasted OPEC on Twitter, accusing the group of "artificially" raising oil prices.

Brent and WTI hit 3-1/2-year highs in May but have since drifted lower, indicating investors expect the market to soon become better supplied as US crude production rises and as OPEC and its allies look poised to increase output. Benchmark Brent crude was up 87 cents, or 1.2%, at $76.75/Bbl by 2:28 p.m. ET.

"The timing of the meeting comes at a crucial time when global crude oil prices are at the highest since the peak of 2014", the statement added.

"Even if the Iran/Venezuela supply gap is plugged, the market will be finely balanced next year, and vulnerable to prices rising higher in the event of further disruption", the report said.

Trump sent out his tweet hours after returning to Washington from a summit with North Korean leader Kim Jong Un in Singapore and it was not immediately clear what prompted his comment.

Gulf producers Saudi Arabia, Kuwait and the United Arab Emirates are the main OPEC members holding sufficient unused oil production capacity to boost output quickly to offset a shortage.

Various sources show that "considerable uncertainty as to world oil demand and non-OPEC supply prevails", OPEC said, leading to a wide range of estimates for the remainder of 2018.

OPEC producers and non-OPEC countries struck a deal in 2016 to trim production by 1.8 million barrels per day to reduce a global glut of oil.

"Markets are braced for the most fractious conference as OPEC members look fundamentally divided", said Phillip Futures analyst Benjamin Lu.

Prices peaked in late May, scraping the $80 per barrel ceiling on the Brent futures contract and $72.24 on the West Texas Intermediate.

"Expect more of the same whippy markets driven by rumors and innuendo ahead of the June 22 Vienna OPEC meeting", Innes said. The country pumped 11.09 million barrels a day in the first week of June, according to a person with knowledge of the matter, exceeding its agreed limit of 10.95 million.

Official US production and inventory data is due to be published on Wednesday by the Energy Information Administration (EIA). The kingdom reported that it increased production in May to about 10 million barrels a day.

Oil prices turned positive on Wednesday after a bigger-than-expected decline in US crude inventories along with surprise drawdowns in gasoline and distillates indicated strong demand in the world's top oil consumer.

The IEA, which coordinates the energy policies of industrialised nations, said stocks in developed countries fell to their five-year average - a metric used by Opec to measure the success of the output cuts.

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