At their meeting in Vienna last month, OPEC countries and key ally Russian Federation said they will raise production by a million barrels per day, but analysts are concerned it may not be enough for oil prices to spiral out of control, at least until new US shale production comes on stream. If anything, they are driving prices higher as the USA defends many of their members for very little $'s.
Similarly, the Organisation of Petroleum Exporting Countries (OPEC) report indicated that Saudi Arabia raised oil output by nearly 500,000 barrels per day last month.
Saudi Arabia cut pricing for most of its oil grades as the world's biggest crude exporter is increasing production to assure buyers there is sufficient supply following U.S. President Donald Trump's demands that OPEC do more to stabilize oil markets.
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. "Please stop this method", the oil ministry news agency quoted Kazempour Ardebili as saying.
"The more that Saudi Arabia adds to the market, the less of a supply cushion we have - that's a bullish twist to a bearish development", said Yawger at Mizuho.More news: Trump administration seeks more time to reunite families
Looming U.S. sanctions on Iranian crude exports, force majeure in Libya and unplanned pipeline outages in Nigeria have been clouding the supply outlook despite rising output by the Organization of the Petroleum Exporting Countries.
US crude futures slipped on Thursday after data showed an unexpected 1.3 million-barrel build in crude inventories.
USA crude inventories fell by 4.5 million barrels to 416.9 million barrels in the week to June 29, the American Petroleum Institute (API) said on Tuesday.
USA light crude jumped $1.17 to US$75.11 a barrel, its highest since November 2014.
Although Saudi Arabia and Russian Federation have said they would raise output to make up for disruptions, FGE said "there simply is not enough capacity to make up for Iran's crude losses, plus Venezuela and Libya", and warned of the possibility of oil prices rising to $100 per barrel.More news: Neymar 'needs to cut out diving' - Germany legend Lothar Matthaus
Oil prices have climbed sharply in recent months, with the price of a barrel hitting a multi-year high of around $78 on Wednesday. "This must be a two-way street", he wrote.
He added that his refinery had canceled US crude imports and would switch to Middle East or West African supplies instead.
He said: "Supply side disruptions that are bullish for oil, and demand side forces including the threat of trade protectionism that threaten the global economy and would thus be bearish for oil prices and most other commodities".
While Saudi Arabia is facing mounting pressure from Trump to do more, America's oil sanctions on Iran and trade frictions with China are adding to uncertainties as the planned U.S. tariffs on Chinese goods are set to start on Friday.
Kazempour Ardebili said Trump was trying to fuel tensions between Iran and Saudi Arabia in advance of a meeting between Iran and the five remaining signatories of a deal restricting Iran's nuclear program.More news: Spurs Reportedly Want Essentially the Entire Lakers Core for Kawhi Leonard