Donald Trump, Saudi king discuss oil markets, no mention of production plans

Trump says Saudi king agreed to raise oil production up to 2 million barrels

Trump asks Saudi Arabia to increase oil production

In the tweet, Trump appeared to indicate his belief that current oil prices are too high.

A little over an hour later, the Saudi Press Agency reported on the call but offered few details.

The White House statement said instead that while King Salman bin Abdulaziz confirmed his country has the extra production capacity, the Saudis will "prudently" use it "if and when necessary to ensure market balance and stability, and in coordination with its producer partners, to respond to any eventuality". It said they had discussed the need to "preserve the stability of the oil market". It did not elaborate.

Trump tweeted that after the two men had a phone conversation Friday King Salman had "agreed" to increase oil production, "maybe up to 2,000,000 barrels". Gasoline prices at the pump are also expected to rise as more Americans take to the roads in the middle of the peak summer driving season.

U.S. retail unleaded gasoline prices, including taxes, averaged $2.833 a gallon for the week ended 25 June, according to the nation's Energy Information Administration.

The development comes days after Saudi Arabia, the world's biggest oil exporter, agreed to go all in with production. Prices spiked after the agreement was released.

"We will be in uncharted territory", Amrita Sen, chief oil analyst at Energy Aspects London, said.

Oil analysts and consultants nonetheless think the kingdom can produce more than 12 million barrels a day in an emergency through a so-called surge, in which oil fields are depleted beyond what engineers consider a reasonable rate.

President Donald Trump says he has received assurances from King Salman of Saudi Arabia that the kingdom will increase oil production, "maybe up to 2,000,000 barrels", in response to turmoil in Iran and Venezuela.

As Tehran seeks ways to counter USA sanctions that would restrict its exports and eat into its market share, Iranian Oil Minister Bijan Zanganeh wrote to his UAE counterpart, Suhail al-Mazrouei, who holds the OPEC presidency in 2018, urging him to remind OPEC members to adhere to last month's agreement.

"The Trump support base is probably the part of the U.S. electorate that will be the most sensitive to an increase in USA gasoline prices", Halff said. "He has agreed! (sic)", Trump tweeted. "We maintain our Brent crude forecast of $70.80 per barrel for 2018 and $66 for 2019, following the OPEC meeting, though highlight some moderate upside risks for 2018", she said.

At a meeting of the Organisation of Petroleum Exporting Countries in Vienna last weekend, Saudi Arabia - the group's largest producer -agreed to scale back its compliance with output cuts that have been in place since the beginning of 2017. Its record is 10.72 million barrels a day.

Khalid Al Falih, Saudi Arabia's energy minister, stated that the new agreement implies an output increase of one million barrels per day, while other OPEC members indicated an increase of 500,000 to 800,000 bpd. That's highly ironic because Trump had been whingeing about higher oil prices and urging higher production. Saudi Energy Minister Khalid Al-Falih indicated the group's action would add almost 1 million barrels a day to the market.

Washington said last week it was asking customers in Asia and Europe to reduce Iranian oil purchases to zero from November, and that it will not grant any waivers to sanctions. "They're not used to this kind of public messaging".

"They bring to bear economic pressure to separate the nation from the system. but six USA presidents before him tried this and had to give up", Khamenei was quoted as saying on Saturday by his website, referring to Trump. South Korea accounted for 14 percent of Iran's oil exports previous year, according to the US Energy Department. Turkey stood at 9 percent and Italy at 7 percent.

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