US President Donald Trump resumed his criticism of OPEC, saying on Twitter that the cartel “must get prices down now!” as the global benchmark crude flirted with $80-a-barrel earlier this week.
Futures dropped as much as 1.1 percent in London on Thursday, while New York-traded oil was little changed. Trump’s intervention in the oil market follows indications from Saudi Arabia that $80 is an acceptable price level as Iran grows increasingly isolated because of US sanctions. OPEC and allied producers will meet in Algeria this weekend to discuss production targets.
“Will he get what he wants? Probably not,” said Rob Haworth, who helps oversee $151 billion at US Bank Wealth Management in Seattle. “You’ve got room for OPEC to grow and probably offset declining Iranian production. On the downside, you are still losing Iranian and Venezuelan production.”
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember,” Trump tweeted.
With American elections coming in early November, Trump “wants to keep pressure on the group ahead of the mid-term elections,” said Giovanni Staunovo, commodity analyst at UBS Group AG.
Saudi Arabia has markedly increased oil exports to America, a sign OPEC’s leading producer is responding to pressure from Trump.
Brent for November settlement fell 69 cents to $78.71 at 10:56 a.m. The contract traded at a $8.22 premium to WTI for the same month.
West Texas Intermediate for October delivery, which expires Thursday, slid seven cents to $71.05 on the New York Mercantile Exchange. Total volume traded was about 23 percent above the 100-day average. The more active November contract fell 16 cents to $70.61.
The president’s first attack on the Organization of Petroleum Exporting Countries came on 20 April, just hours after Saudi Arabian Oil Minister Khalid Al-Falih said the group would continue production cuts. Within a month, the kingdom had performed a dramatic U-turn and by June the cartel and its allies were promising to add one million barrels a day to the market.
Meanwhile, OPEC was said in July to be consulting with lawyers to prepare a strategy to defend against proposed US legislation that could open up the cartel to antitrust lawsuits, according to people familiar with the matter at the time. Saudi Arabia previously hired former Solicitor General Ted Olson as a lobbyist to campaign against the “NOPEC” bill.