Iran tells Trump: Please stop tweeting, you're driving up oil prices

Iran tells Trump: Please stop tweeting, you're driving up oil prices

Iran also faces the backlash of sanctions on exports.

The market was expecting "higher exports and lower imports, but we got the reverse", said Rob Thummel, managing director at Tortoise, which handles $16 billion in energy-related assets.

Oil prices have risen in the past 12 months to a peak in late June and early July. Though it's unclear if the kingdom will end up pumping up to an extra two million barrels of oil per day, as Trump is demanding.

Saudi Arabia, the world's biggest exporter with the largest amount of spare capacity, has given only a muted response to Trump.

Anthony Cordesman, a scholar at CSIS, wrote the week before the handshake that Saudi Arabia is the "most important single security partner" for the United States in the Middle East. Those who enjoy lower costs and can generate higher revenues from improved exports. This is on the top of 1.5 mbpd of Venezuelan production lost during the last two years and another disruption expected from Libya due to rising conflicts.

On Tuesday, Morgan Stanley raised its Brent forecast to US$85 per barrel, from US$77.5, citing concerns that the United States may succeed in blocking much of Iran's 2.7 million barrels per day. "Because the oil market is already in tight supply due to the numerous outages, this would drive global prices (Brent) further up", Commerzbank said in a note.

On Thursday, Saudi Arabia said that it would be reducing prices of its Arab Light grade crude exports. The price of diesel fuel used largely by truckers was $3.17 a gallon, up 30 percent from a year ago, AAA said.

North Korea said to scheme to keep nukes
US National Security Adviser John Bolton speaks during a press conference in Moscow, on June 27, 2018. The joint statement, however, gave no details on how and when Pyongyang would relinquish its weapons.

These cuts have been the greatest gift to shale. As such, the long-term oil curve is in backwardation and already indicates a moderation of up to $ 15 per barrel in the coming years.

Canadian oil prices are poised to continue their slow, steady march upward next year as shipping bottlenecks ease and U.S. refiners look north to fill the gap created by decreasing output from Venezuela, according to Deloitte.

Mounting worldwide isolation in Venezuela, one of the founding members of OPEC, as well as USA sanctions pressure has pushed its oil production to historic lows. OPEC thought that the American oil industry would cave in to the OPEC pressure and shut down wells, or better yet for OPEC, many American oil companies would go bankrupt.

At the same time, Trump wants countries around the world to stop buying Iranian crude oil - a key part of his decision to withdraw from the Iran nuclear deal and reimpose sanctions.

The period of price manipulation was a failure.

If you've noticed that the prices at your local gas stations have been going up and down like a yoyo lately, you can blame it on the fickle price of oil. Now OPEC must think about the future, forgetting an inflationary past that will likely never return. This article first appeared in Forbes.

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