U.S. West Texas Intermediate and global benchmark Brent crude oil futures are trading lower early Thursday and for the week after President Trump turned up the heat on OPEC to reduce prices for crude.
Oil was trading at over $78 per barrel of the Brent benchmark on Thursday, while US West Texas Intermediate was trading at $74.55. WTI rose above $75 for the first time since 2014 on Tuesday. As the 2018 mid-term elections loom, Trump's threat to the Saudi-led OPEC oil cartel is a sign to voters that he's doing something about rising prices at the pump (even if it's just sending tweets).
This is while world oil prices have climbed higher as the Trump administration has pressured U.S. allies to end all purchases of oil from Iran. If anything, they are driving prices higher as the United States defends many of their members for very little $'s.
Trump late on Wednesday accused the Organization of Petroleum Exporting Countries (OPEC) of driving up fuel prices.
"This must be a two way street", he wrote, adding in block capitals, "REDUCE PRICING NOW!"
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USA crude oil production stagnated for the first week in many months, reaching 10.9 million bpd in the week ending June 22, holding steady for three weeks in a row, according to the EIA.
OPEC together with a group of non-OPEC producers led by Russian Federation started to withhold output in 2017 to prop up prices. By withdrawing from the deal, America reimposes economic sanctions on Iran, impacting Tehran's ability to sell its oil on the market.
"A key driver of the rise in prices has been the OPEC-Russia deal to cut oil output, compounded by collapsing Venezuelan production and the U.S. decision to end the Iran deal", National Australia Bank (NAB) said in its July outlook.
OPEC and Russian Federation said in June they were willing to raise output to address concerns of supply shortages due to unplanned disruptions from Venezuela to Libya, and likely also to replace a potential fall in Iranian supplies due to USA sanctions.
Iran's deputy commander of the Sarollah Revolutionary Guards said on Wednesday that any attempt to thwart its oil exports will result in the closure of Strait of Hormuz, the narrow waterway at the mouth of the Persian Gulf, where the world's biggest concentration of tankers carry about 30 percent of all seaborne-traded crude oil and other liquids during the year.