Oil prices edge up as US supply tightens, Iran sanctions loom

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Earlier this month, however, the U.S. president pointed the finger elsewhere, blaming the Organization of the Petroleum Exporting Countries (OPEC) for high oil prices.

As the 2018 mid-term elections loom, Trump's threat to the Saudi-led OPEC oil cartel is a sign to voters that he's doing something about rising prices at the pump (even if it's just sending tweets). If anything, they are driving prices higher as the United States defends many of their members for very little $'s.

Speaking to the Wall Street Journal, Michael Cohen, Head of Energy Commodities Research at Barclays, said the market was now "caught between two forces".

Brent crude oil edged up Wednesday after a second consecutive drop in USA crude inventories, driven by an outage at the Syncrude Canada oil sands facility, which usually supplies the U.S.

Earlier, Kazempour Ardebili had said that Trump's pressure on global firms not to buy Iranian oil would drive prices higher and end up hurting the American economy. The Saudis said on Tuesday that they would increase production to offset what's not coming into the market from Venezuela and Iran (whose oil markets have been hobbled by sanctions), but did not say by how much. That means there's a shrinking buffer to protect against the shocks like the eventual loss of Iranian oil or a hurricane in the U.S. Gulf of Mexico.

United States light crude settled up 20 cents at US$74.14 a barrel, rebounding from a session low of US$72.73 a barrel.

Also on Thursday, data showed USA crude stockpiles rose unexpectedly last week by 1.2 million barrels.

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The barrel of West Texas Intermediate touched its highest level since November 2014 above $75 on Tuesday but made a deep correction to end the day flat near the $74 mark. "The UAE can increase production at a point when oil price remaining high so they will increase their market share and it is positive for economic outlook and also the fiscal positon will see a surplus this year due to higher oil revenues", she said.

The US President used his usual American foreign policy card, threatening to withdraw American support from "those countries" that are "manipulating" oil prices.

In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase oil output by up to two million barrels, an assertion the White House rowed back on in a subsequent statement.

The global benchmark dropped 24 cents, or 0.3 percent, to $78 a barrel at 3 p.m.in London.

Responding to Trump's demands, Ardebili argued that the U.S.is to blame for imposing sanctions on OPEC members.

Meanwhile, the market continued to watch rising USA crude output, with this week's oil drilling rig count data, an indicator of future production, due at 1 p.m.

Analysis from Swiss investment bank UBS said spare capacity, the amount of extra oil a producer could put on the market in short order, was approachinga 10-year low.

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