London — Crude oil futures remained mixed during morning trade in Europe Thursday, as US President Donald Trump again tweeted critical comments against OPEC, blaming the oil producer group for the rise in gasoline prices.
At 1059 GMT, ICE September Brent crude futures were down 4 cents/b from Wednesday's settle at $78.28/b, while the NYMEX August light sweet crude contract was 22 cents/b higher from Tuesday's settle at $74.56/b.
"I'm always cautious about correlating a single event with price movement," Michael Poulsen, an analyst at Global Risk Management, said Thursday. "But there's definitely a link between Trump's tweet and where we're seeing prices now."
According to Trump, OPEC was driving up domestic gasoline prices while the US provides many members with military assistance, stating that "this must be a two way street."
Wednesday's tweet was the fifth Trump tweet since April 20 aimed at OPEC's influence over oil prices. "REDUCE PRICING NOW!" the president tweeted Wednesday, admonishing OPEC for the lack of oil price pressure.
Market observers and analysts have told S&P Global Platts that Trump's tweets are an attempt to defer blame for rising oil prices. But, they point out, prices are largely rising due to Trump's own policies, particularly his plan to re-impose sanctions on Iran.
Analysts at Commerzbank said that spare capacities in OPEC countries are just sufficient to offset the 2.5 million b/d loss of Iranian crude exports from the market.
However, supply shortages stemming from ongoing turmoil in Libya, Iran's threat on exports from the Strait of Hormuz in response to US sanctions, and the unexpected loss of Canadian Syncrude indicate a well-supported market in the near term as global shortages exceed OPEC's spare capacities.
"If we see more sanctions on Iran, and no waiver on Europe, then prices will definitely remain well supported," Poulsen said.
Market participants expect to see a draw of 5 million barrels when the US Energy Information Administration releases inventory data for last week later Thursday.
"In terms of price movement, it's not really the number that matters, it's people's expectation," Poulsen added.
Looking ahead, a six-country advisory committee headed by Saudi Arabia and Russia will meet July 18 as the first step towards reallocating production quotas in the OPEC/non-OPEC supply accord.
Sources:Platts
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