Oil jumps as market anticipates United States sanctions on Iran

Trump asks Saudi Arabia to increase oil production | TheHill

The market is not short of oil now. The agency didn't say the leaders agreed and didn't make any reference to two million barrels.

The Trump administration is pushing countries to cut all imports of Iranian oil from November when the United States re-imposes sanctions against Tehran, after Trump withdrew from a 2015 nuclear deal agreed between Iran and six major powers, calling it a "defective" agreement.

"Our resolution does not allow any member to produce more than their quota", Iran's OPEC governor Hossein Kazempour Ardebili said.

North American oil stocks have fallen as an outage at Canada's Syncrude has locked in more than 300,000 barrels per day (bpd) of production.

Saudi Arabia, the world's top oil producer, could pump as much as 11 million barrels of oil per day in July, according to Reuters.

"There is also some analysis from energy sector experts who say that Saudi Arabia could perhaps increase its daily output but it would only be for a very short time and the quality of the oil produced would be very low amd very hard to refine". A trend reversal is expected only on a close below $64 a barrel.

U.S. retail unleaded gasoline prices, including taxes, averaged $2.833 a gallon for the week ended 25 June, according to the nation's Energy Information Administration. Trump's tweet, however, mentioned no time frame for the additional 2 million barrels - whether it meant per day or per month.

But oil officials cited by The Wall Street Journal said it is debatable whether the kingdom would be able to raise output by the amount Trump suggested.

In a statement issued Saturday night, the White House did not specify that Saudi Arabia would increase production but that "King Salman affirmed that the Kingdom maintains a two million barrel per day spare capacity, which it will prudently use if and when necessary to ensure market balance and stability, and in coordination with its producer partners, to respond to any eventuality".

Key buyers Turkey and India, who had continued purchasing oil throughout the previous sanctions under the Obama Administration, may continue trading with the Subcontinent, although India is concerned about the risk of losing access to the United States financial system. If so, such a boost would be significant for the country's oil production, which hit 10.03 million barrels per day (bpd) in May.

It was not clear if Trump meant an extra two million a day, but analysts speaking to Bloomberg News believe the kingdom can produce more than 12 million a day - which would leave an nearly two-million barrel gap per day.

Trump says on Twitter Saturday that he asked Salman to increase oil production "to make up the difference.Prices to (sic) high!"

Non-OPEC Russia, meanwhile, was under pressure from its own energy companies to lift caps on output and fight a steep rise in domestic fuel prices that was hurting President Vladimir Putin's popularity, Russian sources have said.

Crude oil's gains have been buoyed by a dispute in Libya over oil-marketing rights that is restricting the country's export capacity.

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