Saudi Arabia has increased crude production "significantly" to a near-record level amid intense pressure from U.S. President Donald Trump to reduce prices. Trump told a campaign rally in the US state of MS on Tuesday night. You might not be there for two weeks without us.
Sources told Reuters earlier on Wednesday that Russian Federation and Saudi Arabia had informed the United States of their private deal to raise supply before a meeting in Algeria with other producers.
"Iran is the main supportive factor and is a test to the spare capacity of Saudi Arabia", said Petromatrix analyst Olivier Jakob. At the end of September, Trump reportedly called the Saudi King, and although the nature of that conversation was not disclosed, most oil watchers believed that the call was an attempt to pressure the Saudis into increasing oil supply. "You have to pay for your military, you have to pay.'" Whether or not he actually said this to the King is questionable, but the fact that he appears to be insulting the Saudi monarchy in public offers more evidence that he wants them to lower oil prices from today's highs. His administration, particularly his son-in-law Jared Kushner, has sought a close relationship with King Salman's son Mohammed bin Salman, the country's crown price and next in line to the throne.
In addition to lowering oil prices, Trump has called on close US allies to shoulder more of the cost of defense spending, but Tuesday warning marked the most serious criticism of Riyadh.
Meanwhile, U.S. gasoline prices are up ahead of November midterm elections in which Trump already faces political headwinds.
Speaking at the United Nations General Assembly in NY last month, Trump accused OPEC members of "ripping off the rest of the world".
Brent crude, the global benchmark, fell 12 cents to $84.68 a barrel at 1125 GMT, reversing an earlier gain. Not good. We want them to stop raising prices.
He has also pressed other US allies, such as Japan, South Korea and Germany, to take more of the financial burden of their defense.