Oil prices fall after Trump tells OPEC to increase output

Oil prices fell on Thursday after US President Donald Trump told OPEC to increase crude production to lower the cost of the commodity.

International Brent crude futures fell by $1.14 to $66.69 a barrel by lunchtime, while US West Texas Intermediate (WTI) futures slide $1.02 to $58.39 a barrel.

Trump calls on OPEC to increase production

‘Very important that OPEC increase the flow of Oil. World Markets are fragile, price of Oil getting too high. Thank you!’ Trump wrote in a post on Twitter.

Oil prices have come under significant pressure this week, with an earlier slide driven by a recent report by the American Petroleum Institute, which showed that US crude inventories had risen by 1.9 million barrels last week, exceeding analysts’ expectations who predicted a 1.2 million barrel drop.

Venezuela disruption fails to offset US stockpile data

Even major disruptions at Venezuela’s main oil export port of Jose could not offset the impact of rising US crude stockpiles, with the site’s four crude upgraders unable to resume operations after suffering a major power outage earlier this week.

To make matters worse, crude exports out of Venezuela fell significantly after US authorities opted to ban American refineries from purchasing the country’s oil.

US sanctions imposed on Venezuela and Iran, along with supply cuts agreed by the Organisation of the Petroleum Exporting Countries (OPEC) and other major producers in January have helped oil prices find their footing this year, rising more than 25% since the beginning of 2019.

However, oil prices are expected to rise towards $75 levels in the coming months as global stockpiles steadily decline.

‘Enjoy it whilst it lasts. The upcoming six months will bring relatively healthy demand for OPEC oil,’ PVM’s Tamas Varga said in a note.

‘If the unplanned supply cuts remain in place... oil prices should edge towards $75/bbl ...in coming months as global inventories will draw.’