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DUBAI (BLOOMBERG) – If the world's largest oil exporter says that it will increase production, prices usually fall.
But as Saudi Arabia adds barrels before its customers are burned, prices have jumped. And US President Donald Trump is not happy.
million. Trump tweeted Saturday, June 30 that the Saudi king had agreed to increase production to reduce the cost of oil for consumers
. His statement, Mr. Trump Sunday has added to the pressure, demanding that Opec stop what he calls his manipulation of the oil market and insists that the group pump more.
Saudi Arabia last month led the Organization of Petroleum Exporting Countries and its Allies. While abiding by a 2016 production-limiting agreement, they decided to pump more to offset Opec's supply shortfall in Venezuela and Libya.
Brent has gained 3.7% since then, due to the loss of barrels and the appeal of Mr. Trump for his allies to stop buying from Iran.
The benchmark fell 1.5 percent to US $ 78.22 ($ 106.89) a barrel at 7:25 am in London
"said Jaafa Altaie, chief executive of the Manaar Group Consultant in Abu Dhabi
"The Saudis would prefer a gradual increase in oil production that will not shock the market. They prefer to keep prices between $ 70 and $ 80 per barrel. But for political reasons, they must respond to Trump's demands. "
Mr. Trump tweeted prior to Opec's June 22 meeting that he hoped the group would add barrels, following a message that he had sent out in April during the summer." 39, a meeting of producers.
China, the world's largest consumer of oil, and India, the country that displays the greatest appetite for energy, have added their own complaints after rising prices
Iran, Opec's third largest producer, blasted Trump. "OPEC should reject the US call for a" politically motivated "increase in production Iran, "writes Oil Minister Bijan Namdar Zanganeh, in a letter to the president of OPEC
" The case is over, "said Robin Mills, chief executive Qamar Energy consultant in Dubai.
"It's a real blow to Opec, in pa Because of the impression that the Saudis are following the American auction ines, but mostly because Saudi Arabia and Russia have reached an agreement to increase production before the meeting. "
Mr. Trump's comments could also complicate the planned sale of shares in Saudi Arabian Oil Co, Altaie de Manaar said:
The initial public offering is the centerpiece of the strategy of the kingdom to diversify its economy away from oil, and the government says that it could generate 100 billion US dollars.
The involvement of the US president adds "
" This reinforces the " impression that there is a lack of independence in the company and gives the impression that Trump establishes Saudi oil policy "
. Saudi Arabia, which injected 10.03 million barrels per day in May, could tap into its two million barrels a day of unused production capacity to stabilize markets.
But adding this total amount of crude would create an overabundance According to analysts Wood Mackenzie Ltd and Qamar's Mills, prices could fall.
He could also turn against him, widening the divisions between his geopolitical rivals in Saudi Arabia and Iran and frightening the markets that consider the kingdom as the last world producer.
"More oil on the market must be bearish," Mills said. "But in the longer term, there is the problem of unused capacity that could be optimistic."
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