Saudi Arabia slashes oil prices after Trump slams the 'OPEC monopoly'

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USA sanctions on Iran are being reimposed following Donald Trump's withdrawal from the 2015 nuclear deal between Iran and six world powers back in May. The announcement was made following a cabinet meeting headed by Saudi Arabia's King Salman bin Abdulaziz Al Saud.

The White House later walked back the president's comments, saying the king said his country can raise oil production if needed.

Saudi Arabia, which pumped 10.03 million barrels daily in May, could tap some of its two million barrels a day of unused production capacity to stabilize markets.

Saudi Arabia's crude output reached 10.3 million barrels a day in June, and the bank doubts the country can sustain an increase above 11 million in 2018.

"The Trump support base is probably the part of the US electorate that will be the most sensitive to an increase in USA gasoline prices", Halff said.

He was not specific on whether the additional two million barrels was a per-day figure - but worldwide daily demand is nearing 100 million bpd.

OPEC should reject the USA call for a production increase which is "politically motivated against Iran", he said.

He addressed Trump by saying that the global oil market now does not have sufficient amount of oil to supply U.S., adding "you are putting pressure on those OPEC member states that you claim to be your allies".

Traders have also been watching US oil production C-OUT-T-EIA, which has surged by 30 percent over the last two years to 10.9 million bpd, absorbing some of the recent disruptions.

Saudi Arabia now produces some 10 million barrels of crude oil each day.

At the same time, Iranian Oil Minister Bijhan Zanganeh reminded Riyadh that "any increase in the production by any member country beyond commitments stipulated in OPEC's decisions. would constitute a breach of the agreement". Average pump prices in the USA are up 13 percent this year, rising above $3 a gallon in April for the first time since 2014. Canadian oil prices are poised to continue their slow, steady march upward next year as shipping bottlenecks ease and US refiners look north to fill the gap created by decreasing output from Venezuela, according to Deloitte. 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.

But the U.S. official, Brian Hook, also said that keeping prices stable in the absence of Iranian crude is also important.

Oil held near US$74 a barrel amid estimates that U.S crude inventories declined for a fourth week, compounding concerns that global markets are growing increasingly tight.

China is the largest importer of Iranian oil with 24 percent, followed by India with 18 percent.

Over the weekend, President Donald Trump tweeted that Saudi Arabia agreed to increase crude oil production by 2 million barrels per day (Mbd) to cool high oil prices and make up for supply shortfalls due to current outages in Venezuela and future supply losses in Iran.