United States crude rises 1.4% on signs OPEC will not boost output

Sean Reid
September 22, 2018

Increases in both crude oil prices and in net OPEC oil exports drove revenues higher in 2017, and the EIA expects that revenues will continue to increase in 2018, based on its August 'Short-Term Energy Outlook'.

OPEC is meeting soon to discuss output limits, which will give Saudi Arabia a chance to blame the United States for rising prices.

The trade dispute is raising concerns about the potential for slower growth in oil consumption, offsetting supply concerns stemming from the upcoming USA sanctions on Iran over its nuclear program.

Iran is now the third-largest producer in OPEC.


Administration officials said on Saturday that President Donald Trump was likely to announce the new tariffs as early as Monday.

Brent crude oil was up 70 cents a barrel at $78.79 by 1345 GMT.

"No country is allowed to take over the share of other members for production and exports of oil under any circumstance, and the Ministerial Conference has not issued any licence for such actions", Iran's oil ministry news agency SHANA quoted Kazem Gharibabadi, the permanent envoy to Vienna-based organizations, as saying.

On Tuesday, the global oil benchmark rose 1.3 percent on a media report that Saudi Arabia, the world's largest oil exporter, was comfortable with prices above $80, indicating the producer would not try to increase output to drive prices lower.


Oil prices slipped on Tuesday morning in Asia as the US vowed to impose 10% tariffs on a further $200 billion worth of Chinese goods on Monday, which rattled the markets.

Brent may fall more than $1 to $76.37 a barrel, while WTI crude prices may revisit their September 14 low of $67.94, he wrote.

Bloomberg reported that while Saudi Arabia had no desire to push prices higher than US$80, it may no longer be possible to avoid it.

Intensifying trade tensions between the USA and China could hit economic growth and reduce crude oil demand next year, while supply disruption risks could push prices further upward, according to the International Energy Agency (IEA).


The rally could stop and prices could turn lower if someone counters with concerns over future demand in the wake of the announcement of additional tariffs on China by the United States. In the last two weeks, Al-Falih has met his counterparts from Russian Federation and the U.S., Alexander Novak and Rick Perry, to discuss the oil market and the impact of U.S. sanctions on Iranian petroleum exports.

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