Surprise rise in U.S. oil inventories pushes crude prices down

Surprise rise in U.S. oil inventories pushes crude prices down

Washington: US President Donald Trump on Wednesday accused the Organization of Petroleum Exporting Countries of driving up oil prices, in a fresh swipe at the cartel´s agreement to cap production.

Their combined strength should also give them a say over matters such as oil exports from Iran after the United States pullout from the Iran nuclear deal.

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. Russia's production was 11.1 million barrels a day at the beginning of June, exceeding its quota, according to sources familiar with the matter.

The OPEC warned in the report that a high degree of uncertainty was hanging over the global oil market this year. Saudi Arabia said it was cutting deeper to lead by example. The two countries together accounted for nearly 17% of world oil consumption a year ago, making them ideally suited to take on the oil exporting cartel.

Earlier in the session, Brent and USA crude futures had retreated on concerns about rising production in the United States and expectations that OPEC and other producers could relax voluntary output cuts when they meet on June 22-23 in Vienna.

West Texas Intermediate traded at US$66.03 a barrel and Brent crude was at US$75.83 a barrel.

OPEC kingpin Saudi Arabia in January publicly floated the idea to extend the cooperation agreement which was struck by 24 OPEC and non-OPEC producers in late 2016 to trim output to shore up prices. USA light crude was 40 cents lower at $65.96. In response, Saudi Arabia, Iran's rival and the largest producer in OPEC, said it would consider increasing supply.

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Russian Federation and Saudi Arabia, the leaders and largest producers of the non-OPEC and OPEC producers in the deal, have started to hint that they could reverse some of the cuts "to ease consumer and market anxiety", and reports have it that the production boost could be as much as 1 million bpd.

"Iran has already signaled that it will resist any such attempts and blames the USA for the price rise".

Saudi Arabian Crown Prince Mohammed bin Salman and President Vladimir Putin are meeting in Moscow tomorrow to discuss oil policy on the sidelines of the opening match of the FIFA World Cup.

The OPEC Basket price per barrel of crude oil is $74.11. "As has been the case for some years, China and India together will contribute almost 50 per cent of global oil demand", the agency had said in a report.

"The fact that Saudi Arabia wants lower prices in the near term is becoming increasingly obvious", Amrita Sen, chief oil analyst at Energy Aspects Ltd.in London, said in a note to clients. Trump tweeted on April 20.

The International Energy Agency (IEA) believes a recent spike in the oil price could soon start to ease, helping to alleviate concerns that surging prices could hurt demand and global economic growth.

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