Venezuela is said to urge OPEC to unite against sanctions

Andrew Cummings
June 10, 2018

The request comes after US retail petrol prices surged to their highest in more than three years and US President Donald Trump publicly complained about Opec policy and rising oil prices.

While the US government has often expressed opinion against OPEC's oil price-fixing policies-including a recent comment by President Trump, asking for a specific amount of oil production boost is a rare move, Bloomberg's sources noted.

Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), is struggling to meet its supply obligations, with dozens of tankers waiting to take on its oil.

In announcing his decision, Trump also warned that the USA would impose the "highest level" of sanctions on Tehran.

US crude oil production hit another record last week at 10.8 million barrels per day (bpd).

Oil prices on Thursday rose on the back of plunging exports by OPEC-member Venezuela, recovering some ground lost in the previous session, although another surge in US production still weighed on markets, traders said, Reuters reports.

"The views are so widely different among OPEC members that they'll probably fail to reach an agreement at the meeting later this month", Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone in Seoul.

May shipments were 39.05 million tonnes, or 9.2 million barrels per day.

Venezuela has the world's biggest oil reserves and is a key supplier to American fuel markets but its output has been hampered by inadequate investment, mismanagement and a confrontation with the United States that has led to sanctions. Prices have been trading under pressure following comments from Russian Federation and Saudi Arabia that they could consider curbing their output cuts when they meet on June 22. United States crude oil stockpiles were forecast to have fallen for the second consecutive week, a preliminary Reuters poll showed on Monday. "For some OPEC members, this is too much", the source said. When the U.S. announced it would reimpose sanctions on Iran in November, Ice Brent futures rose by $2.36/bl on the day. "The 2017 oil demand in Africa and the Middle East grew by around 100,000 b/d, as compared to 2016, while oil demand declined in Latin America for the third year in a row", said the report. The increase shows that lack of supply that is coming from OPEC crude relative to supply from USA production.

In late April, Trump in a tweet criticized OPEC for high oil prices.

Other reports by iNewsToday