Donald Trump reignites Opec spat over 'too high' oil prices

Donald Trump reignites Opec spat over 'too high' oil prices

Oil prices eased on Thursday, dragged down by rising output, although strong demand and a drop in USA fuel inventories provided the market with some support.

Prices were pulled down by another rise in US oil production C-OUT-T-EIA, which hit a weekly record of 10.9 million barrels per day (bpd) last week, according to the Energy Information Administration (EIA) on Wednesday.

The benchmark price of crude has surged from around $50 a barrel last summer to within a breath of $80 a barrel a few weeks ago.

India and China are discussing ways to boost imports of US crude to Asia, a move aimed at reducing their dependence on cargoes from members of the Organization of Petroleum Exporting Countries, according to an Indian government official.

"More oil from OPEC plus is the base case", said Bjarne Schieldrop, analyst at Swedish bank SEB. Saudi Arabia has already started pumping more crude.

OPEC is a group of 14 nations that seeks to coordinate oil production and greatly influence oil prices.

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US presidents have always faced a predicament in balancing national security and geopolitical priorities with democratic values. This means that North Korea is independent from all other nations, and refuses any global involvement from foreign countries.

However, OPEC's president, Suhail Al Mazrouei, said on Tuesday that the US has not asked the group to increase oil production in the wake of political unrest in oil-rich Venezuela and USA sanctions on Iran.

Although Saudi Arabia has benefited from oil's rally over the last two years, the government relies on a strong security relationship with the US, giving Washington some influence in the debate over OPEC policy. Russia's production was 11.1 million barrels a day in June, exceeding its quota, according to sources familiar with the matter.

IEA's scenario showed that by the end of next year output from these two countries could be 1.5 million bpd lower than now, amid United States sanctions against Iran and the production collapse in Venezuela. "Not good!", the president tweeted on Wednesday morning.

While the world turns its eyes on the Vienna OPEC meeting, oil market watchers are also monitoring activity in Trump's home market, where higher prices are feeding more production of American shale oil. Bob Goodlatte, R-Va., said shielding a cartel like OPEC "makes a mockery of USA antitrust law, threatens the American economy and has the potential to harm our national security".

Jason Bordoff, a Columbia University professor and former energy adviser to President Barack Obama, said politicians always fret when gasoline prices rise before a big election. "Adjusted for inflation, these prices are not out of line with where we've seen oil prices for the last decade or two". "At current prices USA oil producers are still losing money".

Charles Schumer, the leader of Senate Democrats, recently linked $3-plus gasoline to Trump's decision to revive sanctions on Iran.

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