Oil falls after Trump pushes OPEC to make up for Iranian sanctions
A petrobras oil platform floats in the Atlantic Ocean near the Guanabara Bay in Rio de Janeiro.
Getty Images
Oil prices fell on Monday, prolonging a decline from Friday ending weeks of rally after President Donald Trump demanded the producer club OPEC increase production to soften the effects of US sanctions against Iran.
Burned raw futures were $ 71.59 per barrel 0840 GMT, down 56 cents, or 0.78 percent, from their last close.
Foreign Western Texas Intermediate (WTI) crude futures were at $ 62.93 per barrel, down 37 cents, or 0.58 percent, from their previous settlements.
Both references dropped around 3 percent in the previous session. On Friday, Trump said he told the organization of the petroleum exporting countries (OPEC) to lower oil prices.
"Petrol prices come down. I called OPEC, I said you have to bring them down. You have to bring them down," Trump told reporters.
"Talked to Saudi Arabia and others to increase the oil flow. Everyone agrees," said the president later.
Trump's remarks triggered a selloff, and at least set a temporary ceiling on a 40 percent rise in oil prices since the beginning of the year. The rally had gained momentum in April after Trump has tightened sanctions against Iran by ending all exceptions that large buyers, especially in Asia, had previously.
Traders said the market shifted its focus to the voluntary supply cuts led by OPEC, de facto led by the world's largest exporter Saudi Arabia.
"We are of the opinion that Saudi Arabia will increase production as soon as May, which they would probably do at all during the summer," ING Bank said. "The kingdom can increase production by 500 million barrels per day (bpd) and still be in compliance with the OPEC + agreement for the month of May."
The cuts have been backed by some non-OPEC producers, especially Russia, but analysts said this collaboration cannot last beyond a meeting between OPEC and its other Allies, a group known as OPEC +, scheduled for June.
Russia has said it will be able to meet China's demand for oil demand as Beijing is trying to replace imports that usually come from Iran.
"Russia seems to have every reason to resume production levels and the base case will start to (be) we will not see OPEC + agree to expand production cuts, with tweaks to cover the shortage from Iran," Edward said. Moya, senior analyst at futures brokers OANDA.
