Oil falls as Trump demands OPEC cut prices

The White House has backed off a tweet from President Donald Trump indicating he had convinced the king of Saudi Arabia to produce an extra two million barrels of oil per day

The move comes two months after US President Donald Trump announced US withdrawal from the Iran nuclear deal. The announcement was made following a cabinet meeting headed by Saudi Arabia's King Salman bin Abdulaziz Al Saud.

The cabinet affirmed the kingdom's readiness to use its spare capacity when needed to deal with any future changes in oil supply and demand rates in coordination with other producing countries.

Over the weekend, President Donald Trump called on the country to increase production to help ease fast-rising crude prices.

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.

"It is becoming increasingly clear that Saudi Arabia and Russian Federation will struggle to compensate for potential losses in oil production from the likes of Venezuela, Iran and Libya".

First, the United States, because of its vulnerability to world oil prices, has to once again request that the Saudis increase production, compromising Washington's leverage while conducting foreign policy.

Hook declined to say if the kingdom can offer that additional supply, but the USA is "working to minimize disruptions to the global market", Hook said.

Iran is now exporting around 2.5 million barrels per day.

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"The [Iranian] government has a plan. and God willing we are certain that we will be able to sell as much oil as we want", Jahangiri said.

The impact on the tanker trade remains unclear as oil buyers could turn to regular sources such as Saudi Arabia for more barrels, or look further afield at long distance sources such as the US.

The drop is in contrast to the strong growth in oil prices seen last week as prices started to nudge close to $80 per barrel. After leading the Organization of Petroleum Exporting Countries and its allies to cut production at the start of past year, the kingdom has seen its hold on the world's top oil consuming region reduced as rivals from the U.S.to Iran boost exports.

US crude futures were also down 25 cents at $73.89, not far from Tuesday's 3-1/2-year high above $75. "We do not know how the market will react but prices will surely decrease".

China, India, Japan, and South Korea are the top customers of Iranian crude. He said he expects European countries to unveil a package of measures in the coming days created to keep the deal alive.

He added that it is "incorrect and unwise" to think that "one day all oil producing countries would export their surplus oil and Iran would be the only country that can not export its oil". "We are also working with oil market participants, including producers and consumers, to ensure market stability".

"In the near-term, the level of OPEC production - deployment of spare capacity by Saudi Arabia, Iraq, UAE, Kuwait (and ex-OPEC by Russia), and involuntary disruptions in Libya, Venezuela, Iran - are more important drivers of crude prices", Goldman Sachs said in a note published late on Monday.

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