Trump, Iran spar over oil prices ahead of OPEC meeting

President Donald Trump

President Donald Trump

Earlier in the session, Brent and US crude futures had retreated on concerns about rising production in the United States and expectations that OPEC and other producers could relax voluntary output cuts when they meet on June 22-23 in Vienna.

Gulf producers Saudi Arabia, Kuwait and the United Arab Emirates are the main OPEC members holding sufficient unused oil production capacity to boost output quickly to offset a shortage. "You can not place sanctions on two OPEC founder members and still blame OPEC for oil price volatility", he said in a statement to Reuters, referring to itself and Venezuela.

The group is due to meet on June 22 in Vienna, Austria, to discuss future production policy.

Oil prices steadied on Thursday, but were likely to remain under pressure from evidence of rising US output and uncertainty over the outlook for supply before a key meeting next week of the world's largest exporters.

Oil prices have risen by around 60 per cent over the past year after the Organisation of the Petroleum Exporting Countries and some non-OPEC producers, including Russian Federation, started reducing supplies in 2017.

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In any agreement, the amount of extra oil supplied to the market could end up being lower than the pledged boost.

Novak met with al-Falih in Moscow ahead of the Russia-vs-Saudi Arabia opening match of the World Cup and discussed a gradual exit from the cuts.

"The prospect of easing supply curbs from OPEC-led producers continues to be reflected in oil's overall depressed price action", said Lukman Otunuga, analyst at futures brokerage FXTM.

Data released Tuesday by the U.S. Commerce Department show the consumer price index for gasoline is up 21.8 percent from a year ago.

There are now fears that prices could rise steeply if supplies are disrupted from OPEC members Venezuela and Iran. Another issue raised by Pradhan was the "Asian Premium" - or a higher price - charged by West Asian oil exporters for shipments to Asian buyers, as opposed to Europe.

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Various sources show that "considerable uncertainty as to world oil demand and non-Opec supply prevails", Opec said, leading to a wide range of estimates for the remainder of 2018.

China and India have so far this year accounted for about 69 percent of the expected growth in crude oil demand, meaning that what happens in those two behemoths is likely of far more importance to the crude market than what may or may not happen in Vienna.

Iran's OPEC governor, Hossein Kazempour Ardebili, fired back at Trump in a statement to Reuters.

Trump's tweet - similar to one he wrote in April, blaming OPEC for "artificially Very High" oil prices - came a week before a much-anticipated OPEC meeting in Vienna and may have been created to influence the discussion.

There is also the rising risk of an escalation of trade tensions and a tariff war with the administration of U.S. President Donald Trump.

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