Saudis weigh lure of higher oil prices as United States asks for more

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"It is a real blow to OPEC, in part because of the impression the Saudis are following U.S. bidding, but mostly because Saudi Arabia and Russian Federation had stitched up a deal to raise production anyway even before the meeting".

After cabinet meeting on Tuesday, the official Saudi Press Agency (SPA) quoted a statement of the leadership that the Kingdom is prepared to utilise its spare production capacity when necessary to deal with any future changes in the levels of supply and demand.

The White House later backtracked on the president's tweet, while Saudi Arabia did not confirm Trump's comments.

Iran is among the nations with the highest oil serves, along with Saudi Arabia, which is the world's leading exporter of oil.

Iran shipped out over 2 million barrels per day of oil past year, with Asia taking almost three quarter of the supply and the remainder heading to Europe.

Kazempour said Trump was trying to intensify tensions between Iran and Saudi Arabia. "It all kicked off at the weekend with Trump claiming the Saudis had agreed to an extra 2m barrels a day which is physically impossible, they just can't do that", he said. After leading the Organization of Petroleum Exporting Countries and its allies to cut production at the start of a year ago, the kingdom has seen its hold on the world's top oil consuming region reduced as rivals from the U.S.to Iran boost exports.

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An agency report on Tuesday indicated, however, that despite the U.S. push on Saudi Arabia, futures in NY jumped as much as 1.7 per cent.

Prior to Trump's public berating, Bill Richardson, the energy secretary during the second administration of Bill Clinton, phoned the Saudi oil minister in the middle of an OPEC meeting in 2000 asking for a production increase, enraging other members of the cartel and exacerbating a schism between Saudi Arabia and Iran. Keeping oil price around $70 per barrel serves both economic and political goal. 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.

On Tuesday a senior State Department official described tightening the noose on Tehran as "one of our top national security priorities". Rising gasoline prices could create a political headache for Trump before November mid-term congressional elections by offsetting Republican claims that his tax cuts and rollbacks of federal regulations have helped boost the US economy.

Multinationals that have halted business in Iran include oil companies of Total and Shell, the world's largest shipping container line Maersk, and aircraft producers of Airbus and Boeing.

The world's biggest crude exporter is preparing to ramp up oil production, possibly by as much as two million barrels per day, amid U.S. sanctions on Iran.

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