Saudi Arabia acknowledged the call took place, but mentioned no production targets.
Oil prices have edged higher as the Trump administration has pushed allies to end all purchases of oil from Iran following the US pulling out of the nuclear deal between Tehran and world powers. "We maintain our Brent crude forecast of $70.80 per barrel for 2018 and $66 for 2019, following the OPEC meeting, though highlight some moderate upside risks for 2018", she said.
USA retail unleaded gasoline prices, including taxes, averaged $2.833 a gallon for the week ended 25 June, according to the nation's Energy Information Administration. Trump a year ago chose Saudi Arabia for his first foreign trip. Prices over the past two months have been higher than any time since late 2014, according to the Energy Information Administration.
The White House statement said instead that while King Salman bin Abdulaziz confirmed his country has the extra production capacity, the Saudis will "prudently" use it "if and when necessary to ensure market balance and stability, and in coordination with its producer partners, to respond to any eventuality". That was after Saudi Energy Minister Khalid al-Falih said the kingdom would honor the OPEC decision to stick to a 1-million-barrel increase. Any 2 million bpd-increase would thus be at least double market expectations.
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After the US State Department on Tuesday urged allies and companies to stop buying crude oil from Iran by 4 November, global benchmark Brent crude gained 6.5 per cent and American benchmark West Texas Intermediate jumped 9.3 per cent between Tuesday and Friday.
Output is expected to rise to 11 million barrels in July, according to Reuters.
Saudi Arabia has a maximum sustainable capacity of 12 million bpd, but it has never tested that level of production.
FGE, an energy consultancy, said in its June newsletter that the U.S. is determined to "push Iran's exports to zero". Trump past year chose Saudi Arabia for his first foreign trip. "It's certainly easy to imagine a scenario at this point where oil prices hit $100 again this year", said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University.
The Democratic opposition has blamed part of that increase on Trump's decision to withdraw the USA from the 2015 nuclear deal with Iran, while Republicans fear that rising gasoline prices will tiresome Americans' enthusiasm for the U.S. economy as they approach next November's legislative elections. The cartel, which had curtailed production in 2016, also said it would boost output more later in the year to offset limits on Iranian oil sales resulting from the re-imposition of USA sanctions on Iran. Moreover, increased production by GCC countries will also reduce any market fears of further supply shortages especially as Iranian sanctions take hold in November.