Saudi Arabia’s king pledges to raise crude oil output if needed

Trump asks Saudis to up oil output to lower prices

Saudi Arabia’s king pledges to raise crude oil output if needed

The overt pressure brought by Trump on Saudi Arabia is unusual, but the kingdom has been actively urging the president to withdraw from the worldwide agreement that placed restrictions on Iran's nuclear program.

Iran has accused Trump of trying to politicise Opec and said it was United States sanctions on Iran and Venezuela that helped push up prices.

Saudi Arabia on Saturday confirmed that United States President Donald Trump and its King Salman have spoken about the stability of the oil markets, but made no mention of any deal for Riyadh to boost production. Average prices for unleaded gas, including taxes, averaged $2.83 a gallon for the week ending June 25 - up about 55 cents over the same period a year ago.

Trump's warning last week about buying oil from Iran threw doubt and confusion into the energy market.

President Donald Trump said on Saturday that he had received assurances from King Salman of Saudi Arabia that the kingdom will increase oil production, "maybe up to 2,000,000 barrels" in response to turmoil in Iran and Venezuela.

OPEC agreed with Russian Federation and other oil-producing allies on June 23 to raise output from July, with Saudi Arabia pledging a "measurable" supply boost, but giving no specific numbers. The Trump administration indicated that the White House would look to sanction countries that don't reduce their imports of Iranian crude to "zero" by November. 4.

"Saudis are used to U.S. requests for oil", Halff said.

Iranian oil production is expected to fall from the fourth quarter of 2018 as United States sanctions take effect.

The White House statement undercut a tweet by Trump earlier in the day when he wrote that Saudi Arabia had definitely agreed to produce more oil.

After the US State Department on Tuesday urged allies and companies to stop buying crude oil from Iran by 4 November, worldwide benchmark Brent crude gained 6.5 per cent and American benchmark West Texas Intermediate jumped 9.3 per cent between Tuesday and Friday.

Saudi Energy Minister Khalid al-Falih met with US Secretary of State Mike Pompeo in Washington on Thursday to discuss energy security. "We maintain our Brent crude forecast of $70.80 per barrel for 2018 and $66 for 2019, following the OPEC meeting, though highlight some moderate upside risks for 2018", she said.

Saudi Arabia has the capacity to pump a maximum of 12.04 million barrels a day, according to the International Energy Agency. That's up about 55 cents from the same period previous year, at a time Trump's Republican Party is trying to hold on to its majorities in Congress in the November midterm elections. "The re-imposition of sanctions on Iran may have been factored into the rapid increase in oil prices in recent months", Iradian added.

Iran had been pushing hard for oil producers to hold output steady as USA sanctions are expected to hit its exports.

"I guess the Saudis want to give the confidence to Trump to go very hardcore on Iran", tweeted the oil market's most vocal bull, commodities hedge-fund manager Pierre Andurand.

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