Oil prices declined Thursday after President Trump told major oil producers in the Middle East to find a way to push oil prices lower.
Light, sweet crude for October delivery was 0.2% lower at $71.01 a barrel on the New York Mercantile Exchange. On Wednesday, the U.S. benchmark settled at $71.12 a barrel, its highest closing level since July 10. Brent crude, the global benchmark, fell 0.5% Thursday to $79.05 a barrel.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” Mr. Trump said in a morning post on Twitter. “We will remember. The OPEC monopoly must get prices down now!”
His comments follow a nearly 10% rise over the past 30 days in the price of West Texas Intermediate, the U.S. benchmark for crude oil. That has helped send the average price of gasoline for U.S. consumers nearly a nickel higher, to $2.87 a gallon, according to price-tracking service GasBuddy. In July, Mr. Trump partially blamed the Organization of the Petroleum Exporting Countries for highest U.S. pump prices.
Mr. Trump’s comments also come just a couple of days ahead of a meeting in Algeria this weekend among key members of OPEC and Russia-led non-OPEC oil producers, where they would discuss oil prices and production levels.
Earlier this week, Saudi Arabia officials reportedly indicated they would be comfortable with oil prices even rising a bit more, at least temporarily.
Peter Cardillo, chief market economist at Spartan Capital Securities, said Trump’s comments Thursday may not have a long-lasting effect on oil’s upward trend.
“The run up in oil prices this morning is being interrupted by a Trump tweet blasting OPEC for not keeping prices lower,” he said. “The question is, will this reverse market sentiment? We don’t think so. It may lean on prices for a brief period of time, but the fundamentals and the Iranian situation are behind a solid run up.”
Mr. Cardillo was referring to U.S. sanctions on Iran that prohibit countries and companies from buying Iranian oil exports. The ban on Iran oil exports takes effect officially in November, but its impact is already being felt, which is reducing global oil supplies and helping to push oil prices higher.
The modest retreat Thursday in oil prices comes after a nearly 2% rise Wednesday on a U.S. Energy Information Administration weekly report that showed U.S. crude inventories had fallen by 2.1 million barrels last week, to 394 million barrels. It was the fifth straight week of declines and the lowest level since February 2015.
Brent has been edging ever closer to the symbolic $80 a barrel threshold. It temporarily breached $80 a barrel last week for the first time since May, briefly returning to a more than 3 1/2-year high.
We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!
— Donald J. Trump (@realDonaldTrump) September 20, 2018
“Brent is definitely fighting the $80 a barrel line, wanting to break above but is still held back by the $70-$80 a barrel range hypothesis,” said Bjarne Schieldrop, chief commodities analyst at SEB Markets. “But this is likely to break very soon,” he added.
Among refined products, gasoline futures for October delivery fell 0.3% to $2.0152 a gallon. Diesel futures fell 0.5% to $2.2385 a gallon.