Oil tumbles more than 3% as Trump again urges OPEC to lower prices

By Laila Kearney NEW YORK (Reuters) - Oil prices sank more than 3 percent on Friday after U.S. President Donald Trump again pressured the Organisation of the Petroleum Exporting Countries to raise crude production to ease gasoline prices. Profit-taking from the oil market's strongest bull run in at least a year also pushed prices through technical stops which accelerated the decline, analysts said.

Reuters April 27, 2019 00:05:52 IST
Oil tumbles more than 3% as Trump again urges OPEC to lower prices

Oil tumbles more than 3 as Trump again urges OPEC to lower prices

By Laila Kearney

NEW YORK (Reuters) - Oil prices sank more than 3 percent on Friday after U.S. President Donald Trump again pressured the Organisation of the Petroleum Exporting Countries to raise crude production to ease gasoline prices.

Profit-taking from the oil market's strongest bull run in at least a year also pushed prices through technical stops which accelerated the decline, analysts said.

Brent crude futures dropped $2.75, or 3.7 percent, to $71.60 a barrel by 1:46 p.m. EDT (1746 GMT), a one-week low. West Texas Intermediate crude fell $2.20, or 3.4 percent, to $63.01 a barrel, a three-week low.

Brent was poised to be flat on the week, while WTI was headed for a 1.6 percent weekly loss.

Crude futures had rallied about 40 percent higher this year after OPEC and several allies cut supply by 1.2 million barrels per day, and as sanctions on Venezuela and Iran have reduced output. Prices were now up more than 30 percent this year after Friday's losses.

On Thursday, Brent rose above $75 a barrel for the first time this year after Germany, Poland and Slovakia suspended imports of Russian crude via a major pipeline due to contamination. Russia, which expects to resume pipeline supply on April 29, said it believed the oil could have been deliberately contaminated.

Trump told reporters on Friday that he had called OPEC and told the cartel to lower crude prices, without identifying who he spoke to.

Since taking office, Trump has weighed in on OPEC on numerous occasions on Twitter, often exhorting the cartel to lower prices. His comments tend to have a temporary effect on the market, and some traders noted that the recent move higher made the market ripe for profit-taking.

"I think the market should be more sceptical because I don't think OPEC is going to jump every time Trump calls," said Phil Flynn, analyst at Price Futures Group in Chicago. "Now, if we actually see evidence that OPEC is raising production, or says they'll do it right away, that could change things."

U.S. oil drillers this week cut the most rigs since the week to Jan. 18, down 20 rigs to a total of 805, as independent producers follow through on plans to cut spending on new drilling and completions. [RIG/U]

The U.S. rig count, an early indicator of future output, has fallen below year-ago levels when 825 rigs were active.

Traders also said the selloff was in part due to rumours that Washington could grant China an exemption allowing it to keep buying Iran's oil, which would increase available worldwide supply. Washington said on Monday that it would end all exemptions for sanctions against Iran.

"The market had gotten all bulled up on Iran output, or exports going to zero or close to it," said John Kilduff, a partner at Again Capital LLC in New York.

The United States and China are continuing to negotiate a trade deal to end a months-long dispute.

(Additional reporting by Shadia Nasralla in London, Henning Gloystein; Editing by Marguerita Choy and Alistair Bell)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.