Oil prices rise as Trump calls for OPEC to offset Iran sanctions
Oil prices edged higher on Monday, as the market attempted to resume a weeks-long rally that was halted on Friday when Donald Trump demanded that producer club OPEC raise output to soften the impact of US sanctions against Iran.
TRUMP HAD TIGHTENED SANCTIONS
Brent crude futures fell 11 cents, or 0.2 percent, to settle at $72.04 a barrel while US West Texas Intermediate (WTI) crude futures climbed 20 cents, or 0.3 percent, to end the session at $63.50.
Both benchmarks fell by about 3 percent on Friday after Trump told reporters that he had called OPEC and told the cartel to lower oil prices, without identifying who he spoke to, or if he was speaking about previous discussions with OPEC officials. Analysts and market participants downplayed the comments as details were unclear.
“No representative of OPEC or the Saudi government has come forward to acknowledge any discussion in this regard,” said Jim Ritterbusch, president of Ritterbusch and Associates. “This obvious effort to push gasoline prices down has been attempted previously by Trump and while forcing an initial price decline, such pullbacks have been followed by fresh price highs, sometimes within a matter of days.”
Trump’s remarks initially triggered a sell-off, putting a temporary ceiling on a 40 percent price rally since the start of the year. The slide was exacerbated by technical factors including an excessive speculative long position in US crude, analysts said. Speculators raised their combined futures and options net long positions in New York and London by 24,078 contracts to 326,818 during the week to April 23, the highest level since early October. That was the ninth consecutive increase.
The rally in oil prices had gained momentum in April after Trump tightened sanctions against Iran by ending all exemptions previously granted to that major buyers.
US sanctions against Iran’s oil industry will damage the stability of global oil markets, a senior Iranian official was quoted as saying on Monday. “These sanctions are an example of America’s bullying reaction to the change of the balance of power in the world,” Amir Hossein Zamaninia, a deputy oil minister for Iran, said in a report carried by the oil ministry’s news website SHANA.