UAE set to pump more oil to stabilise market

UAE set to pump more oil to stabilise market

UAE set to pump more oil to stabilise market

Futures closed just 0.3 per cent higher after surging past US$75 a barrel earlier in the session.

The rise in benchmark USA crude prices from a low of less than $30 a barrel in February 2016 to more than $70 in July 2018 has boosted the economies of Texas, Oklahoma, North Dakota and other producing states.

Trump's OPEC tweets come as gasoline prices are more than 60 cents a gallon higher than a year ago.

Speaking yesterday in reaction to President Trump's series of tweets about OPEC's fuel prices, the Iranian official accused the U.S president of driving oil prices up with his tweets. It went down when US shale producers started pumping more, taking advantage of the higher price.

"This must be a two way street", he wrote, adding in block capitals, "REDUCE PRICING NOW!"

Trump has repeatedly called on the oil cartel to reduce prices.

Trump took aim at OPEC for not doing enough to offset the supply disruptions and keep down the oil prices, which have risen to their highest mark in more than three years.

If Gulf countries do not increase oil outputs to cover the shortfall left by Iran, America may not defend them, US President Donald Trump has warned in a tweet.

"If Trump continues to believe that OPEC are not doing enough, we would not rule out an SPR (Strategic Petroleum Reserve) release from the USA, or possibly even export restrictions on petroleum products", ING said in a note. His message was conveyed by the Iranian oil ministry's news service Shana. If the US succeeds in blocking Iran from exporting its oil, OPEC would struggle to offset the missing barrels.

Last month, members of OPEC agreed to pump an additional 1 million barrels of crude daily, a move that should help contain prices.

The latter have soared in the last two years to around 400,000 barrels per day in July, worth around $1 billion at current market prices. Saudi Arabia agrees with Trump on the importance of keeping prices down but has not committed to increasing output sufficiently. As oil prices rise, the United States oil industry and in particular the growing shale oil will claim a victory.

Iran's OPEC governor Hossein Kazempour Ardebili said the U.S. ban amounted to "self harm", adding that Iran's position is that oil should not be used as a weapon or for political purposes.

Saudi Arabia has wanted to sell shares in Aramco to bring in foreign investment to diversify its economy, but legal concerns about listing in places like London or NY have presented complications. The company said it can pump as much as 3.3 million barrels per day and will boost output to 3.5 million barrels a day by the end of 2018.

An imminent shift in global oil trade flows was also affecting prices. "We will make the enemy understand that either all can use the Strait of Hormuz or no one", Mohammad Ali Jafari, commander of the Islamic Revolutionary Guard Corp, was quoted as saying by Tasnim news agency.

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