Oil drops after Trump asks OPEC to increase production to replace Iranian oil

SINGAPORE (Reuters) – Oil prices fell on Monday, prolonging Friday's fall after weeks of rallying after President Donald Trump asked OPEC to increase production in order to boost oil prices. mitigate the impact of US sanctions against Iran.

Brent futures were trading at $ 71.80 per barrel at 2:15 am GMT, down 35 cents from their latest decline.

The WTI futures price (West Texas Intermediate) was $ 62.91 per barrel, down 39 cents from the previous settlement.

Both landmarks dropped by about 3% in the previous session.

The ANZ bank said on Monday that oil prices "had suffered a shock after President Trump had indicated that he had been talking to Saudi Arabia to reduce the impact of declining exports of oil. Iranian oil by increasing flows elsewhere ".

Trump said Friday that he had called the Organization of Petroleum Exporting Countries (OPEC) and had asked the cartel to lower oil prices.

"The prices of gasoline are down. I called OPEC, I said that they had to shoot them down. You have to lower them, "Trump told reporters.

This statement triggered a massive selloff, capping at least temporarily the oil price rally to 40% since the beginning of the year. Graph: GRAPHIC: Brent crude oil price, click on tmsnrt.rs/2XWLBqT

The rally had gained momentum in April after Trump tightened sanctions against Iran by ending all the exemptions previously granted by major buyers, particularly in Asia.

Traders said the market was increasingly focused on voluntary cuts in supply driven by OPEC, a producer club dominated by the Middle East, since the beginning of the year. .

The cuts have been supported by some non-OPEC producers, notably Russia, but analysts have indicated that this cooperation could not last beyond a meeting between OPEC and its other allies, a group known as OPEC +, scheduled for June.

Russia said it would be able to meet China's demand for oil while Beijing is trying to replace the imports usually received from Iran.

"Russia seems to have every reason to start raising its production levels again and the baseline scenario should begin to materialize.We will not see OPEC + agree to extend production cuts, with adjustments to make up for the Iranian shortfall, "said Edward Moya, Senior Analyst at OANDA's Future Brokerage.

At the same time, Russia hopes to restore oil pipeline supply to Central and Western Europe in two weeks, after their suspension last week due to crude quality problems.