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07 July 2018, 11:48 | Kelvin Horton
President Rouhani talks to Iranian expatriates in Bern Switzerland
Futures in NY were 0.3 per cent higher following the US Independence Day holiday, remaining near the highest since 2014.
In late morning trading Thursday, the price of the global benchmark Brent grade of crude oil was little changed at $77.85 a barrel.
West Texas Intermediate crude futures gained 61 cents to $73.55 by 11:30 a.m.
The clash over OPEC policy and the resumption of United States sanctions on Iran has been amplified this week as Trump continues to target the group which he blames for rising prices.
Trump accused the Organization of the Petroleum Exporting Countries of a price "monopoly" as they are "doing little" to help ease the prices increase.
Brent was being pressured by expectations for higher Saudi and Russian Federation production, which impacts Europe and Asia, where Brent is the benchmark, more than markets dominated by USA crude prices. This must be a two way street.
Saudi Arabia also said it would reduce the official selling price of its August barrels.
Trump's efforts to contain spiking oil prices came amid piling pressure on the President ahead of November midterm congressional elections, in which he has to prove claims that tax cuts and federal regulations helped in boosting the economy.
This week's price action indicates the market appears to have absorbed the recent announcement that an OPEC-led group and Russian Federation will raise output by about 1 million bpd.
He addressed Trump by saying that the global oil market now does not have sufficient amount of oil to supply USA, adding "you are putting pressure on those OPEC member states that you claim to be your allies".
"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.
In response, Ardebili warned, "Your tweets have driven the prices up by at least $10 per barrel". And yet, you are asking them to reduce the prices?!
Every extra dollar on the price of a barrel of crude costs USA consumers roughly $3 billion a year, assuming refining margins and fuel taxes remain constant, and ignoring gasoline consumption by businesses and the like.
Anthony Cordesman, a scholar at CSIS, wrote the week before the handshake that Saudi Arabia is the "most important single security partner" for the United States in the Middle East.
US crude stockpiles rose 1.3-million barrels last week, according to data from the US Energy Information Administration (EIA), against analysts' expectations of a 3.5-million-barrel decline. Saudi Arabia agrees with Trump on the importance of keeping prices down but has not committed to increasing output sufficiently.
While OPEC leader Saudi Arabia will pick up the slack, Morgan Stanley believes oil markets will be undersupplied by around 600,000 in the second half of 2018. It's telling that this is his third provocation on oil prices since April.
Recent price rises have also been spurred by a US announcement that it plans to re-introduce sanctions against Iran from November, targeting oil exports.
Hossein Kazempour Ardebili, Iran's ambassador to the Organization of the Petroleum Exporting Countries (OPEC), was quoted by media as saying that the world - and specifically American consumers - would eventually consider Trump blameworthy for runaway oil prices in worldwide markets. Inventories at Cushing, Oklahoma, fell 2 million barrels last week, according to a separate forecast compiled by Bloomberg.
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