Trump's Tweet on Deal With Saudi King Makes Oil Prices Plummet

Iran’s President Hassan Rouhani is seen at the airport in Tehran

Oddly, oil prices did not spike at the start of trading on Monday, which suggests oil traders clearly didn't entirely dismiss President Trump's bold claim that OPEC would add 2 mb/d. That's the highest US oil prices have been since 2014.

The price of a barrel of West Texas Intermediate Crude was up over $73 late last week. Perhaps that is why the White House walked back President Trump's comments when they published details of Trump's conversation with King Salman.

Russian Federation and Saudi Arabia will face "dire consequences" if they increase their oil production, the head of the state energy firm said.

USA crude stockpiles are forecast to have declined 5 million barrels last week, according to a Bloomberg survey ahead of government data released on Thursday. He says that, despite a seemingly saturated market, a number of factors are keeping US oil prices high. "There is little confidence in the market that we're going to escape an ever-tightening supply and demand balance now", said John Kilduff, co-founder at energy hedge fund Again Capital.

"Normal countries don't terrorize other nations, proliferate missiles and impoverish their own people", Hook said. In June Saudi Arabia produced crude about 10.7 million barrels per day, which is more than 700,000 barrels more than a month ago.

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The developments were preceded by US President Donald Trump tweeting about his telephone talk with Saudi King Salman bin Abdulaziz Al Saud, who allegedly agreed to Washington's proposal to increase Riyadh's daily oil production to two million barrels.

"We touched upon the question of changing the monitoring methodology in the light of our objective to reduce the level of deal implementation to 100% according to the statement of OPEC and non-OPEC countries".

While the Saudis are likely to increase production of lighter, sweeter export grades, the country also has to consider the impact of bringing too much oil too soon, which could put a strain on its own output. "Even if there is short term relief by an agreement to increase output, it is a demonstration once again that US sovereignty is undermined by foreign interests who control global oil supply, reducing our control over our economy, our foreign policy, and our future". He said in the Fox interview that European companies would face sanctions if they traded with Iran now. Saudi Arabia has the largest spare capacity of about 2 million barrels, which would be stretched to the limit if the kingdom would have to make up for lost supplies.

"In this battle", he said, "any country that tries to take Iran's place on the oil market will be guilty of treason against Iran. and surely one day it will pay the price of this treason".

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