The White House late Saturday issued a statement backing down from Donald Trump's earlier tweet indicating that he had convinced Saudi Arabia's king to produce as much as 2 million barrels of additional oil a day to bring prices down.
Brent price on Friday rose $1.54 a barrel to $79.39 on concerns that U.S. sanctions against Iran would remove a substantial volume of crude from world markets at a time of rising global demand. "There is no way one country could go 2 million barrels a day above their production allocation unless they are walking out of OPEC", he said.
Russia, Iraq, the UAE and Kuwait jointly have another million barrels, so there is spare production of 3 million barrels a day.
Oil was the star commodity over 2017-18, and now, despite the move by OPEC to ease its production cap (with Russian Federation and other producers), some analysts are wondering when $US100 a barrel will be regained for the first time since 2014.
The output increases come as the United States has urged some OPEC members to raise output to compensate for supply losses caused by renewed US sanctions on Iran. Saudi oil officials did not comment.More news: Donald Trump slams Democrats' push to abolish ICE
The move would compensate for "turmoil [and] disfunction" in Venezuela and Iran, both members of the Organization of Petroleum Exporting Countries, Trump said in a tweet Saturday morning.
The average per-gallon price for gasoline in the United States was $2.85, a jump of 63 cents from a year ago, according to AAA.
Trump has repeatedly lashed out at Opec on Twitter in recent months, piling pressure on Riyadh, a major ally, to boost output as he hopes for lower pump prices before midterm congressional elections in November.
"Once you get above that level, we are into uncharted territory", said David Fyfe, chief economist at the Gunvor Group, a major trading house.
The price of Brent, the global benchmark hit $US79.23 on Friday at the close, up more than 2% on the day. "While Saudi Arabia has the capacity in theory, it takes time and money to bring these barrels online, up to one year", said Amrita Sen of consultancy Energy Aspects.More news: Belgian World Cup player kicks ball right into his face
Other analysts were more doubtful about immediate effects.
He did not specify if the figure was barrels per day (bpd), the normal measure for oil production.
His comments come as oil prices have edged higher as his administration pushes USA allies to end oil purchases from Iran.
The curbs were meant to help drain a global oil glut, a goal that has largely been achieved, though supply disruptions are now adding pressure to prices.
"Any unilateral production increase beyond member countries' commitments under the OPEC's decisions would prompt U.S.to take actions against Iran", he wrote. Venezuela is in the midst of an economic crisis, which has caused oil production to plummet.More news: Trump says he'll name high court pick on July 9
Iranian oil production is expected to fall from the fourth quarter of 2018 as United States sanctions take effect. "The president is asking the central bank of oil to make a massive injection of liquidity into the market".