Latin America Energy, Oil and Gas, News and Information

Dwayne Harmon
July 9, 2018

"If anything, they are driving prices higher as the United States defends many of their members for very little $'s".

Such a move by Beijing-which appears more likely with this latest round of tit-for-tat tariffs-threatens to limit USA crude oil exports to China that have been gaining pace in recent months and eating into OPEC's share in the market-a market that is setting the pace of global oil demand growth. Rising gasoline prices could create a political headache for Trump before November mid-term congressional elections by offsetting Republican claims that his tax cuts and rollbacks of federal regulations have helped boost the United States economy.

If you've noticed that the prices at your local gas stations have been going up and down like a yoyo lately, you can blame it on the fickle price of oil. "REDUCE PRICING NOW!" Trump concluded the tweet.

"Investors are cautious since no one knows to what extent the Iranian sanctions will impact the market, and disruptions globally are taking supplies out faster than expected", said Will Yun, a commodities analyst at Hyundai Futures in Seoul.

Trump criticized OPEC on Twitter again for failing to lower prices for consumers.

This sent the markets into a spiral as they opened on Monday (July 2), as the price of Brent Crude fell 0.8 per cent to $78.54, while West Texas Intermediate also took a tumble to hit $73.95.

Ardebili said Iran is also on the "two-way street" as a member of OPEC.

"With those continued drawdowns at Cushing, we were approaching a situation where you could soon start to consider us nearing a shortage", Kilduff said.

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USA crude inventories probably declined by 5 million barrels last week, according to a Bloomberg survey. And that realization has helped drive up prices over the past two weeks as countries and traders worry about the security of future supplies.

However, the Chinese government has not yet specified a date on which it may introduce duties on imports of US crude.

Mounting global isolation in Venezuela, one of the founding members of OPEC, as well as USA sanctions pressure has pushed its oil production to historic lows.

Even so, renewed USA sanctions on Iran against its oil exports look set to tighten supply further.

However, the market response was minimal given the continuing threat of USA sanctions against Iran and a reported threat by the Iranians to close the Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman and is an important shipping route for oil.

OPEC's production limits, which were implemented and extended multiple times to help bolster prices, have contributed to oil's rise.

"You impose sanctions on major producers, founders of OPEC, and yet you are asking them to reduce the prices?" he was quoted by SHANA, the Iranian oil ministry's news website as saying.

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