There was no confirmation that Saudi Arabia would increase oil production, as President Trump said.
US President Donald Trump's administration backed off an assertion he made hours earlier indicating he persuaded Saudi Arabia to effectively boost oil production to its maximum capacity, which would have threatened to blow up a fragile truce agreed by OPEC last week and inflamed the Saudi-Iran rivalry. Average prices for unleaded gas, including taxes, averaged $2.83 a gallon for the week ending June 25 - up about 55 cents over the same period past year. U.S. Energy Secretary Rick Perry said Thursday that lower amounts of Iranian oil were straining the market.
Amid reports Saudi Arabia's oil output for June is at near-record levels, President Trump tweeted Saturday that Saudi King Salman "agreed" in a phone conversation to increase oil production to roll back oil prices.
The Trump administration is pushing countries to cut all imports of Iranian oil from November when the United States re-imposes sanctions against Tehran, after Trump withdrew from the 2015 nuclear deal agreed between Iran and six major powers, against the advice of allies in Europe and elsewhere.
Meanwhile, Iranian oil production is expected to fall from the fourth quarter of 2018 as U.S. sanctions take effect.
While Venezuela's oil output has been in steep decline, the U.S. bringing back sanctions on Iran is seen as the real reason behind oil prices posting massive gains this week. "Prices to high! He has agreed!" the tweet read. That would be roughly 1 million barrels per day of crude oil output increase according to OPEC officials. It said they had discussed the need to "preserve the stability of the oil market". It closed Friday at $79.44.
"Saudi Arabia obviously can deliver as much as the market would need, but we're going to be respectful of the 1-million-barrel cap - and at the same time be respectful of allocating some of that to countries that deliver it", al-Falih said then.
The impact of rising gas prices in offsetting the pocketbook benefits of the tax cuts approved by Congress in December could dampen public enthusiasm over the economy ahead of the midterm elections. Trump's tweet offered no timeframe for the additional 2 million barrels - whether that meant per day or per month.
He did not specify if the figure was barrels per day (bpd), the normal measure for oil production. "The re-imposition of sanctions on Iran may have been factored into the rapid increase in oil prices in recent months", Iradian added.
US officials are pressing allies in Europe, Asia and the Middle East to adhere to the sanctions once they are re-imposed, with the aim of pressuring Iran into negotiating a new agreement. Trump a year ago chose Saudi Arabia for his first foreign trip.
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