Oil falls as Saudi output rises to compensate for disruptions

SINGAPORE (Reuters) – Oil prices in Saudi Arabia, while U.S. President Donald Trump kept up the pressure on the world to make up for disruptions elsewhere.

Brent crude oil futures LCOc1 were at $ 78.35 per barrel at 0231 GMT, down 88 cents, or 1.1 percent, from their last close.

U.S. West Texas Intermediate crude futures CLc1 were down 89 cents, or 1.2 percent, at $ 73.26 a barrel, after rising more than 8 percent last week.

Trump said in a tweet on Saturday that Saudi Arabia's King Salman bin Abdulaziz Al Saud had agreed to produce more oil. The White House later, said the king, said the king.

Saudi Arabia's output is up 700,000 bpd from May, a Reuters survey found on Friday, and close to its 10.72 million bpd record from November 2016, more than making up for disruptions elsewhere within the Organization of the Petroleum Exporting Countries (OPEC) .

A source last week told Reuters Saudi Arabia produced 10.8 million bpd in June and it aimed to pump 11 million bpd in July.

"If his (Trump's) entreaty to the Saudis to prime the pumps and get them producing correct proves, then it will go to the supply disruptions," said Greg McKenna, chief market strategist at AxiTrader futures brokerage. .

Voluntary supply cuts by OPEC and some non-OPEC suppliers, like tightened world oil markets since 2017, and unplanned disruptions from Canada to Venezuela and Libya along with upcoming new U.S. sanctions against major Iran exports have sparked concerns of supply shortfalls.

Russia vs Saudi vs US oil production: reut.rs/2tMAd43

AHEAD DISORDER

Despite the apparent supply relief from Saudi Arabia, the oil markets remain tense over escalating trade disputes between the United States and other major economies China, the European Union, India and Canada, lobing new US sanctions against Iran.

"Recurring salvos in the trade and falling assets of the global economy, U.S. Bank JP Morgan said in a note.

The bank said a "medium-intensity (trade) conflict would be likely to reduce global economic growth by at least 0.5 percent," before accounting for tighter financial conditions and sentiment shocks. "

Trump warned close US allies in an interview European companies do business with Iran.

"The Trump Administration's plan for Iran sanctions is now abundantly clear. They seek to push Iranian exports of crude, condensate, and oil products to zero, "energy consultancy FGE said in a note.

"Overall, 2.4-2.7 million bpd of Iranian crude / condensate is at risk by year …" FGE added.