Oil Surges Above $75 in NY as Supply Outages Outpace OPEC

President Rouhani talks to Iranian expatriates in Bern Switzerland

President Rouhani talks to Iranian expatriates in Bern Switzerland

U.S. President Donald Trump again accused the Organization of Petroleum Exporting Countries of driving gas prices higher on Twitter on Wednesday and urged the oil cartel's members to do more.

Furthermore, the bulls also derived support from an Iranian threat to block shipments through the Strait of Hormuz while comments from the Iranian government, asking Trump to stop tweeting on oil prices, also helped.

In a follow-up Twitter message on July 4, the president said that "the United States defends many of those countries for very little $'s". This must be a two way street.

"Donald Trump's call on other countries to stop buying crude oil from Iran and putting European companies under pressure with Nigeria and Libya being crisis-stricken, Venezuela's crude oil output having plunged and Saudi Arabia's consumption increasing due to summer, would be a kind of self-harm for the USA as it would lead to dramatic price hikes in the oil market", Ardebili said.

Crude oil prices in recent days have hit their highest levels since late 2014.

But, so far, that hasn't lowered oil prices, largely because of the turmoil caused by Venezuelan and Iranian oil sectors, as well Libya pulling hundreds of thousands of barrels of oil out of the market as a result of upheaval there.

The United States has always been both a major producer and consumer of oil, which means that most presidents have favored moderate oil prices. The worldwide community had expected sanctions waivers for some countries, a tactic used in the Obama era to avoid supply shocks.

A blockade of the strait, through which roughly 30 percent of all seaborne oil travels, would have "dramatic consequences for global oil supply and an impact on prices that is nearly impossible to put into figures", Commerzbank said in a note.

Iranian OPEC Governor Hossein Kazempour Ardebili told Reuters that Trump "should have expected" when blocking Iran's access to the global markets that it would end up as "hostage (to) Saudi Arabia and Russia", who he said had little vested interest in bringing down prices.

Despite that key member Saudi Arabia is affirming that the group and its allies will boost output, Goldman Sachs Group Inc. warned that oil is likely to lead a new rally as the market faces significant supply risks from Venezuela to Iran. Plus, a report today from data-provider Genscape Inc. was said to show Texas Gulf Coast crude stockpiles rose by about 431,000 barrels last week. Analysts and traders were predicting a draw of 1 million barrels.

At 0715 GMT, August WTI crude oil futures are trading $74.00, down $0.33 or -0.46% and September Brent crude oil is at $77.80, down $0.43 or -0.55%.

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