US President Donald Trump has accused the Organisation of Petroleum Exporting Countries (OPEC) of “keeping oil prices artificially very high.”
In tweet, Trump said the cartel’s pricing cycle “will not be accepted” as there is no scarcity of oil supply to warrant such “high prices.”
Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!
— Donald J. Trump (@realDonaldTrump) April 20, 2018
But OPEC secretary general, Mohammad Barkindo, in a swift response, said the US oil and gas industry benefits from the cartel’s efforts to restore stability in the market.
He was speaking from Jeddah, Saudi Arabia.
“We in OPEC pride ourselves as friends of the United States who have vested interest in their growth, development and prosperity,” he said, adding that OPEC, non-OPEC deal “has not only arrested the decline but rescued the oil industry from imminent collapse and is now on course to restore stability on a sustainable basis in the interest of producers, consumers and the global economy”.
Oil prices recorded slight increase on Friday ahead of a meeting by members of the joint OPEC and non-OPEC ministerial monitoring committee (JMMC) meeting, same day.
As at Thursday, OPEC daily basket price stood at $70.96 a barrel, compared with $69.39 on Wednesday, according to calculations by the secretariat.
But West Texas Intermediate (WTI) crude, rose to $68.53 a barrel on Friday, from $68.29 a barrel on the New York Mercantile Exchange on Thursday.
Similarly, Brent crude, the global benchmark inched above the $73 mark on Friday, the highest since 2014.
Expectations are high that the OPEC and non-OPEC JMMC gathering will announce a specific timeline for further extension of its production cap agreement.
CNBC reports that Trump’s agitation may be fueled by news that major oil producers may be targeting much higher oil prices.
Saudi Arabia, a key OPEC member, has conveyed desire to see crude prices at around $80 or even $100 a barrel.
This is partly due to the kingdom’s planned initial public offering of Saudi Aramco, its state oil company.
Speaking in an interview with Bloomberg TV, Barkindo said “geopolitical tensions in the Middle East (Iran) have brought back a premium to crude oil prices”.
According to him, “it wouldn’t be in the interest of producers or consumers to see a price shock” if Iran leaves the cartel based on US “re-imposed” sanctions.