Oil Prices to Be 'Cheaper' if Trump Stops Tweeting, Iran Official Says

Oil prices jumped more than 2 percent to a four-year high on Monday after OPEC declined to announce an immediate increase in production despite calls by US President Donald Trump for action to raise global supply.

The committee said in a statement that it was satisfied "regarding the current oil market outlook, with an overall healthy balance between supply and demand".

The OPEC governor, Hossein Kazempour Ardebili of Iran, said in comments to Reuters that Saudi Arabia and Russian Federation were unable and unwilling to add more production at short notice.

Brent crude hit its highest since November 2014 at $80.94 a barrel, up 2.7%, before falling back to $80.49.

"OPEC is one of the third world's biggest accomplishments in my view, not just in terms of oil producers, but it's an organization that can be effective in the world's economy and it's a good, strong foundation", he underlined.

While Iran is unlikely to see a drop to zero exports, initial assessments by several analysts that about 500,000 barrels per day (bpd) of Iranian oil would be lost appear way too optimistic now.

"I do not influence prices", Saudi Energy Minister Khalid al-Falih told reporters.

Higher prices tend to mean higher petrol costs.

The tightening USA market came ahead of sanctions that Washington plans to implement against Iran's petroleum exports from early November.

Experts estimate that once USA sanctions on Iran are fully implemented from November it could result in the loss of as many as two million barrels a day from global supply.

Add to this the loss of Venezuelan oil because of mounting economic and political problems, and ongoing conflict-related disruptions in Libya, and suddenly the market doesn't look that well-supplied any more.

Bank of America's main scenario is for oil prices next year of around US$80 a barrel, according to the note. "As a result, significant EM oil demand destruction could follow if Brent crude oil spikes above $120/bbl".

At press time, Brent's front-month contract $79.47 per barrel, up 1.57 percent on the day.

It comes amid fears oil prices could hit an eye-watering $100 per barrel as United States sanctions against Iran begin.

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!"



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