Oil falls as Trump urges OPEC to reduce prices

Outage in Alberta's oilsands is pushing U.S. crude to a four-year high

- President Donald Trump says OPEC is "doing little to help" rising gas prices and claims "if anything, they are driving prices higher".

Trump once again called on OPEC countries to do more to bring down crude prices and linked US foreign policy to his demand, saying the USA defends some oil producing countries "for very little" money. Some members should remember that the United States is defending them for little reciprocal benefits, he added.

Top exporter Saudi Arabia told OPEC it had raised oil output by nearly 500,000 barrels per day last month, OPEC sources said, a sign Riyadh wants to make up for shortages elsewhere and dampen prices.

Trump's scramble to slow down the oil rally comes four months ahead of USA midterms, where analysts say rising gasoline prices could hurt Republicans.

In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase oil output by up to 2 million barrels per day, an assertion that the White House rowed back on in a subsequent statement.

Harry Tchilinguirian, head of commodities strategy at BNP Paribas, said when an investor does not have a strong view on which way the price of crude oil futures might move, they tend to take a bet on options instead, to protect themselves. "REDUCE PRICING NOW!" Trump tweeted.

In addition, a potential fall in Iranian supplies due to US sanctions is a factor too.

Ardebili told Reuters that Trump "should have expected" when blocking Iran's access to the global markets that it would end up as "hostage (to) Saudi Arabia and Russian Federation", who he said had little vested interest in bringing down prices.

Brent crude was up 46 cents at US$77.76 a barrel, after trading as low as US$76.67 and as high as US$78.85.

Oil fell on Thursday after USA government data showed an unexpected build in crude oil stockpiles.

Responding to Trump's demands, Ardebili argued that the U.S.is to blame for imposing sanctions on OPEC members.

Kazempour said that Trump is mistakenly attacking some of the "good guys" who are working to boost their output to compensate for Iran, Venezuela and Libya.

The U.S. Energy Information Administration (EIA) reports inventories rose by 1.3 million barrels last week, the first increase in three weeks.

Oil prices have reached a new level over the last few months, with Brent briefly touching US$80/bbl in May, but the last month has seen prices moderately lower, generally in the mid-to-high 70s range, points out the analysis team at NAB. "People are firming up their numbers of how much Iranian oil exports will be lost, and how much OPEC will increase".

The head of Iran's Revolutionary Guards said on Thursday their forces were ready to implement Iran's threat to block the Strait of Hormuz and that if Iran can not sell its oil under the USA pressure, no other regional country will be allowed to.

Zanganeh said Trump's anti-OPEC remarks are the causes of the increase in the prices in the oil market over the past days. "Perhaps one of the US president's advisors should explain this to him", the German financial institution added.

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