Markets

Oil mixed as USA crude stockpiles show surprise build

Oil mixed as USA crude stockpiles show surprise build

US President Donald Trump has tried to calm jittery oil markets by suggesting Saudi Arabia is willing to use up to 2 million barrels per day in spare capacity to meet any supply shortages arising from US sanctions on Iran, writes Nassir Shirkhani.

Canadian oil prices are poised to continue their slow, steady march upward next year as shipping bottlenecks ease and United States refiners look north to fill the gap created by decreasing output from Venezuela, according to Deloitte.

Net U.S. crude imports rose last week by 1.4 million barrels per day.

And naturally the Saudis will ply the President with the old "market balance and stability" line as well - the readout of the telephone conversation between Trump and the Saudi king looked nearly exactly like the conversations other Presidents have had in the past with Saudi Arabia on oil prices - and just as meaningless. If anything, they are driving prices higher as the US defends many of their members for very little $'s.

"Trump's order to OPEC members to increase production is a great insult to those governments and nations, and destabilises the market".

U.S. West Texas Intermediate (WTI) crude futures were at $74.60 a barrel at 0044 GMT, up 46 cents, or 0.6 percent, from their last settlement. "REDUCE PRICING NOW!" Trump tweeted.

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"With contentious midterm United States elections looming, the President continues to strong-arm Saudi Arabia to increase oil supplies which, at least for now, is containing price action below WTI $75 per barrel", said Stephen Innes, Head of Trading for Asia/Pacific at futures brokerage OANDA.

Oil output cuts by OPEC and allies, including Russian Federation, since January 2017 have reduced a glut of crude.

Iran's Oil Minister Bijan Zanganeh talks to journalists at the beginning of an OPEC meeting in Vienna, Austria, June 22, 2018.

Saudi Arabia on Thursday said that it would be reducing prices of its Arab Light grade crude exports.

To make up for potential shortfalls in supply from Iran sanctions as well as other disruptions including Libya and Venezuela, the Organization of the Petroleum Exporting Countries (OPEC) has agreed with Russian Federation and other oil-producing non-OPEC members to raise output from July.

An Iranian Revolutionary Guards commander said on Wednesday that Tehran might block oil shipments through the Strait of Hormuz, a major route for transporting crude in the Gulf.