Oil futures traded lower Thursday ahead of a weekly update on U.S. crude supplies, as President Donald Trump demanded that the Organization of the Petroleum Exporting Countries move to counteract a rally that has prices near 3 ½-year highs.
August West Texas Intermediate crude
CLQ8, -0.22%
on the New York Mercantile Exchange fell by 21 cents, or 0.3%, to $73.93 a barrel. September Brent crude
LCOU8, -0.29%
the global benchmark, was down 28 cents, or 0.4%, at $77.96 a barrel on the ICE Futures Europe exchange.
Trump on Wednesday again complained via Twitter about rising gas prices and said the Organization of the Petroleum Exporting Countries were doing “little to help,” and demanded that the cartel, “REDUCE PRICING NOW!”
The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!
— Donald J. Trump (@realDonaldTrump) July 4, 2018
The tweet comes after Trump on Saturday tweeted that Saudi Arabia’s King Salman had agreed to increase output by 2 million barrels a day. OPEC and its major producer allies, namely Russia, had agreed in a June meeting to effectively raise output by 1 million barrels a day to help counteract lost barrels from Venezuela and Iran.
Indeed, analysts said Trump’s decision to exit from the Iran nuclear accord and the administration’s demands that countries eliminate purchases of Iranian oil have been a key driver of the rally.
“It does not occur to the U.S. president that it is Trump himself who is driving prices up through his Iran policy. Trump wants all countries to reduce their oil imports from Iran to zero. This would strip up to 2.5 million barrels per day from the market,” wrote analysts at Commerzbank, in a note. “The spare capacities in OPEC countries are just sufficient to offset this amount, but will not be enough if supply is additionally reduced by outages elsewhere – such as in Libya and Canada at present – and by falling oil production in Venezuela.”
Also, Iran has threatened to block oil shipments through the Strait of Hormuz if the U.S. continues with its calls for renewed sanctions on Tehran.
The weekly EIA data due Thursday morning is expected to show a 4.5 million barrel fall in crude stockpiles, along with a 2.5 million barrel decline in gasoline inventories and a 250,000 barrel fall for distillate stocks, according to a survey conducted by S&P Global Platts.
The release will be “one of the most-hyped storage reports ever,” said Robert Yawger, director of energy at Mizuho Securities U.S.A., in a note. The storage figure for the Nymex delivery hub at Cushing, Okla., will be key, he said, with the outage of a Syncrude upgrader in Alberta, Canada, expected to result in a big storage draw, while refinery throughput could top 18 million barrels a day for a record. Exports could also challenge the record 3 million barrels a day seen in last week’s report, he said.
“If all those moving pieces pan out, the market will most likely have to digest a very big crude oil draw, which could rally [August WTI] towards Tuesday’s four year high of $75.27,” he said.
Nymex August gasoline
RBQ8, +0.59%
rose 0.6% to $2.130 a gallon, while August heating oil
HOQ8, +0.92%
rose 0.9% to $2.184 a gallon.
August natural-gas
NGQ18, -0.87%
fell 0.8% to $2.845 per million British thermal units, ahead of an EIA update on supplies of the fuel due shortly.
Source : MTV
