Donald Trump and Iran exchanged sharp words over oil prices on Wednesday, with Tehran accusing the USA president of contributing to volatile prices after he withdraw from a global nuclear arms deal last month.
Oil prices edged higher on Wednesday, turning positive after US government data showed a bigger weekly draw than expected in domestic crude inventories along with unexpected declines in gasoline and distillate stocks.
At that time, WTI Crude prices were touching $70 a barrel.
The price surge is taking a toll on heavy-energy users in the U.S., where the producer-price index rose by 0.5pc in May from a month earlier, according to the latest data from the United States labor department.
In part because of strong demand, US crude inventories C-STK-T-EIA fell by 4.1 million barrels in the week to June 8, to 432.4 million barrels.
Donald Trump renewed his Twitter assault on OPEC, pushing the case for lower oil prices a week before the cartel meets to set production policy.
Meanwhile, IEA sees non-OPEC supply rising by 2 million bpd this year, lead by growth from the U.S. But infrastructure and logistics could constrain growth and the IEA only sees supply growth of 1.7 million bpd in 2019. Using drilling advances such as fracking, operators in Texas and North Dakota have pushed US production higher.
Although Saudi Arabia has benefited from oil's rally over the last two years, the government relies on a strong security relationship with the USA, giving Washington some influence in the debate over OPEC policy.
The potential collaboration between the two major oil buyers would present another challenge for OPEC, which is facing competition for market share in Asia from the flood of crude pumped in the Gulf of Mexico and shale fields of Texas.
Domestic production rose to 10.9 million barrels per day up from 10.8 million bpd in the week prior, EIA said.
"The president's tweets are really telling the other oil-producing countries to step up your production to make up for the coming sharp declines that are expected in Iranian oil exports", Yergin said.
Barely recovered from the roller coaster ride of recent weeks, traders are holding their breath for the June 22 meeting of oil ministers from OPEC member states in Vienna. The committee chairman, Rep. The measure now goes to the full House.
Jason Bordoff, a Columbia University professor and former energy adviser to President Barack Obama, said politicians always fret when gasoline prices rise before a big election. Its main concerns are higher oil prices and trade disruptions. Schumer spoke as he stood in front of the price sign - regular for $3.09 - at an Exxon station on Capitol Hill.
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