Oil price soon to reach $100 per barrel

Posted July 08, 2018

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 37 cents, or 0.5 per cent, at 73.77 dollars per barrel.

OPEC and Russian Federation announced in June they were willing to raise output to address concerns of emerging supply shortages due to unplanned disruptions from Venezuela to Libya, and likely also to replace a potential fall in Iranian supplies due to United States sanctions.

Brent crude futures were at $77.70 per barrel at 0653 GMT, down 54 cents, or 0.7 percent, from their last close.

In addition to reducing the price of its August barrels, Saudi Arabia also told the Organization of the Petroleum Exporting Countries (OPEC) that it increased production by nearly 500,000 barrels per day last month.

He said the global hike in oil prices is a result of Donald Trump's demand from some OPEC members to increase their production.

"The more that Saudi Arabia adds to the market, the less of a supply cushion we have - that's a bullish twist to a bearish development", said Yawger at Mizuho.

Saudi Arabia had political reasons to respond positively to Trump's request, given its animosity to arch-rival Iran, which Trump is trying to bring to its knees through strict new sanctions.

Trading activity is expected to by limited on Wednesday due to the U.S. Independence Day holiday. The American Petroleum Institute, an industry body, was said to report that stockpiles fell by 4.51 million barrels.

In his latest tweet on the subject on Wednesday, Trump said that the "OPEC Monopoly must remember that gas prices are up & they are doing little to help". This must be a two way street.

In an interview with state television, Iranian oil minister Bijan Zanganeh said: "Mr Trump sends every day a new message that creates uncertainty in the market".

"As far as the geopolitical posturing via twitter or official statements, I think the market is taking them in stride for now", Tchilinguirian said.

"The responsibility of paying unnecessary prices for oil by all consumers of the whole world, especially in U.S. gas stations, is exclusively upon your (Trump's) shoulders and the price of over $100 per barrel is yet to come", Kazempour said.

US tariffs on $34 billion in Chinese imports took effect as a deadline passed on Friday and Beijing has vowed to respond in kind.