KUALA LUMPUR: The price of crude oil in the international market fell from a three-year high after US President Donald Trump lambasted the Organisation of the Petroleum Exporting Countries (OPEC) and said that current oil prices are “artificially very high.”
In a tweet, the US President said this was “no good” and “would not be accepted”.
The comments came as OPEC and other oil producing countries including Russia showed willingness to further curb production to support prices.
Crude oil prices have rallied in recent weeks as output cuts from OPEC and its allies were compounded by heightened geopolitical risks, including the possibility of renewed US sanctions on Iran.
The price of Brent crude futures contract, the global benchmark, rose to US$73.78 a barrel on Thursday, its highest level since November 2014. It fell to around US$74.75 a barrel at the time of tweet around 8.30am in New York.
The US benchmark, West Texas Intermediate crude futures also fell.
Both contracts had been trading in positive territory before Trump’s tweet.
OPEC and its allies have been curbing output since 2017 to support prices. The current deal is set to expire at the end of 2018.
Reuters reported today that a technical OPEC and non-OPEC committee meeting in Jeddah on Thursday, ahead of Friday’s ministerial meeting, found that a global overhang in oil inventories, which the deal has targeted for eliminating, has virtually disappeared.
OPEC member countries are slated to meet in June in Vienna to decide their next steps after reducing output since January 2017 in a move aimed at supporting prices.
Top oil exporter Saudi Arabia would be happy to see crude rise to $80 or even $100 a barrel, three industry sources have told Reuters, a sign Riyadh will seek no changes to an OPEC supply-cutting deal even though the agreement’s original target is within sight.