Trump: “OPEC is 'ripping off' the world”

Market Trends - 26/09/2018

On Tuesday the President of the United States, Donald Trump said to a meeting of world leaders that OPEC is actually cheating them. He said this before the U.N. General Assembly "OPEC and OPEC nations are as usual ripping off the rest of the world, and I don't like it. Nobody should like it,"  "We defend many of these nations for nothing, and then they take advantage of us by giving us high oil prices.  Not good. "President Trump's comments came only days after OPEC, Russia and many other oil producers declined his latest call to slow down crude prices by increasing production. The combination of about two dozen exporters has been restricting its production since January 2017 in order to stop a punishing oil price slide that "killed" hundreds of American oil corporations and added financial weight on crude-producing nations.

Trump accuses that the strategy is to drive oil futures into a range between about $69 and $82 per barrel and hold the national average gasoline price attached near $3 a gallon. To be sure, the alliance cut production more than expected due to production difficulties in countries like Venezuela and Libya. In June, the union allowed to restore some of that production and return to its goal of keeping 1.8 million barrels a day off the market. But, Trump's decision in May to get out of the 2015 Iran nuclear agreement and renew penalties on the country, The Trump government has forced prices higher this summer by saying to oil consumers they must cut their purchases of Iranian crude to zero by Nov. 4 and if they don't do that they will come across with the U.S. penalties. The threatening deadline has left the market to question whether top exporter Saudi Arabia and other producers can supply the gap left by the anticipated drop of nearly 1 million barrels a day in the coming months. Helima Croft, global head of commodity strategy at RBC Capital Markets. Said "OPEC has actually been a pretty good first responder. They have put a significant number of barrels on the market since President Trump started tweeting and since the June meeting."

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