U.S. West Texas Intermediate and worldwide benchmark Brent crude oil futures are trading lower early Thursday and for the week after President Trump turned up the heat on OPEC to reduce prices for crude.
Brent for September settlement advanced 46 cents to end the session at US$77.76 a barrel on the London-based ICE Futures Europe exchange.
USA light crude jumped $1.17 to US$75.11 a barrel, its highest since November 2014.
"The OPEC Monopoly must remember that gas prices are up & they are doing little to help", Trump tweeted on the Fourth of July.
If the Saudis are indeed prepared to cave to Trump, it creates an existential threat to OPEC which may see Iran and other members quit immediately, if Riyadh has made a unilateral decision to pump more.
Trump's claim comes after the Organization of the Petroleum Exporting Countries (OPEC), a grouping of oil-producing states that includes Saudi Arabia, already agreed to ramp up production by a million barrels a day at a meeting earlier this month.
"This must be a two way street", he wrote, adding in block capitals, "REDUCE PRICING NOW!" There have been supply outages in Venezuela, Libya, Canada, Angola, Iran, and Kazakhstan, according to the trade publication Oil Price.
Brent crude declined from its $115 per barrel peak in June 2014 to below $30 in January 2016 before recovering to its current price of around $78.
OPEC and Russian Federation said in June they were willing to raise output to address concerns of supply shortages due to unplanned disruptions from Venezuela to Libya, and likely also to replace a potential fall in Iranian supplies due to USA sanctions.
The OPEC Basket price per barrel of crude oil is about $74. "Their companies - their companies will be subject to the same sanctions that everybody else's are if they engage in those sectors of the economy that are sanctionable, where there were sanctions imposed prior to 2015", the unnamed U.S. State Department Official told the media on June 26.
The early reaction to Trump's tweet was normal.
The UAE's Abu Dhabi National Oil Co (ADNOC) said on Tuesday it could increase production by several hundred thousand bpd if needed.
Iran has threatened to block oil exports through a key Gulf waterway in retaliation against any hostile USA action. Long story short, he's anxious that higher prices at the pump will eat away at the savings he imagines are accruing to US consumers as a result of the tax cuts.
"If they want to stop Iranian oil exports, we will not allow any oil shipment to pass through the Strait of Hormuz", Ismail Kowsari was quoted as saying.