Oil prices fell again on Thursday, July 5 after US President Donald Trump tweeted on Twitter demanding that OPEC should cut crude prices.
The fiercest US and Chinese trade wars, which triggered the instability of Asian stocks on Thursday, were also felt in the oil market after China warned it could introduce import duty on US crude oil imports on an undetermined date.
Brent crude oil futures LCOc1 were in the range of $ 77.68 per barrel, down 56 cents, or 0.7 percent, from last closing by Thursday, July 5th.
West Texas Intermediate (WTI) futures in the US, CLc1 fell 45 cents, or 0.6 percent, to $ 73.69
Donald Trump accused the Organization of Petroleum Exporting Countries, OPEC, deliberately raising the price of fuel oil.
"reduce pricing now!" Donald Trump to OPEC on twitter
Also read: Trump Urges Saudi to Increase Oil Production by 2M Barrels Per Day
OPEC along with a group of non-OPEC producers led by Russia began to hold production in 2017 to shore up prices.
Recent price increases have also been boosted by the US announcement that it plans to reintroduce sanctions against Iran in November, which target Iranian oil exports.
"The main driver of the rise in prices is OPEC-Russia agreement to cut oil production, compounded by decreasing the production of Venezuela and the US decision to terminate the agreement Iran," wrote National Australia Bank (NAB), as reported by Reuters, July 5th, 2018.
OPEC and Russia announced in June that they are willing to increase production to address concerns of supply shortages arising from unplanned disruptions from Venezuela to Libya, and possibly also to replace Iran's supply-cutting potential due to US sanctions.
On Saturday, Trump wrote on Twitter that he had received assurances from King Salman of Saudi Arabia that the kingdom of Saudi would increase oil production, "possibly up to 2,000,000 barrels" to overcome turmoil in Iran and Venezuela.
Saudi Arabia confirmed but did not mention the production target. Saudi Arabia currently produces an average of 10 million barrels of crude oil daily.
Meanwhile, the Chinese Commerce Ministry warned that the US proposed tariff on Chinese goods would hit international supply chains. The United States plans to impose tariffs on Chinese imports worth $ 34 billion on Friday 6 July.
The Chinese customs said on its website it would impose a retaliatory tariff on US goods, including US crude. However, the Chinese government has not set a date for imposing import duties on US crude oil. Imports of US crude oil to China were about 400,000 barrels per day in July, worth about $ 1 B.
If oil tariffs are imposed, 25 percent import duty will make US crude uncompetitive in China, and force refiners to seek alternative supplies to replace US oil.
Also read: China Releases Travel Warning to the US amid trade wars
Post a Comment