"Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference.Prices to high!"
Crude prices pulled back from earlier session highs reached after Saudi Arabia's OPEC Governor Adeeb Al-Aama said in a statement that the kingdom expects crude exports to drop by roughly 100,000 bpd in August as it limits excess production.
OPEC agreed with Russian Federation and other oil-producing allies last month to raise output from July, with Saudi Arabia pledging a "measurable" supply boost but giving no specific numbers.
The tough USA line on Iran's oil exports has had analysts raise their oil price forecasts, predicting that more oil will be removed from the market. Total commercial petroleum inventories increased by 6.0 million barrels last week.
Crude oil prices are slightly lower today. By 2040, the volume of supply breaking even at above $70 a barrel could be as much as 11 million bpd, WoodMac says.
Al-Aama said Saudi Arabia's policy is to work on satisfying customers' needs, but to do so while adhering to OPEC and non-OPEC supply agreements.
Japan's major oil distributors are considering halting oil imports from Iran in response to US demands, sources familiar with the plan said Thursday.
"The organization's legal team will hold talks in the coming days with law firms including White & Case about the "No Oil Producing and Exporting Cartels Act", one of the people said, asking not to be identified because the information is not public". Prices yesterday dropped 32 cents to US$72.58. A senior United States energy official has told The Wall Street Journal that Washington expects China to buy up much of the oil others won't due to the threat of USA sanctions.
Speculation about a possible supply shortage contributed to oil's recovery.
"The dollar was a one-way ticket for the last couple of weeks and basically reversed directions, giving us some strong support", said Phil Flynn, analyst at Price Futures Group. Slowing trade growth will weigh on physical demand for oil..
Global oversupply still a distinct possibility.
With the record refinery throughput, US petroleum inventories held steady as an accumulation of refined product stocks more than offset the drawdown in crude oil stocks.