The US will punish companies that don't comply with Iran sanctions

The US will punish companies that don't comply with Iran sanctions

Opec (Organisation of Petroleum Exporting Countries) has recently agreed to increase oil supplies.

US President Donald Trump (center R) holds a lunch meeting with Saudi Arabia's Crown Prince Mohammed bin Salman (center L), and members of his delegation.

Saudi Arabia's state-run oil giant cut its prices on Thursday for first time since February after President Donald Trump lashed out at OPEC for rising U.S. gas prices.

U.S. crude stockpiles rose 1.3 million barrels last week, according to data from the U.S. Energy Information Administration, against analysts' expectations of a 3.5 million-barrel decline.

However, we would urge the United States, which has proven oil reserves of 36.2 billion barrels, that it too should increase production and come to the rescue of the global community.

A little more than an hour after Trump's tweet, the state-run Saudi Press Agency reported on the call, but offered few details.

OPEC's June output was 32.32 million barrels per day (bpd), a Reuters survey showed on Monday, up 320,000 bpd from May.

"We'll need more oil down the road and there'll be nowhere to get it", said Flynn, of the Price Futures Group.

However, fears that Trump had persuaded the Saudis to up production were stoked by a tweet which send oil markets tumbling.

The drop is in contrast to the strong growth in oil prices seen last week as prices started to nudge close to $80 per barrel.

“There seems to be great uncertainty about how much oil will be added to the supply side of the market, ” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut, referring to how much Saudi Arabia's spare capacity will be able to offset shortages around the world.

Oil prices edged up on Wednesday, lifted by a report of declining USA fuel inventories amid the ongoing crude supply outage at Syncrude Canada in Alberta, which usually supplies the United States.

Last month, Opec, the cartel of oil-producing states, voted to increase production by up to a million barrels a day in a bid to keep spiralling oil prices steady.

"Recurring salvos in the trade war and falling asset prices raise the question of how much tariffs could damage the global economy, USA bank JP Morgan said in a note".

The State Department has said it expects the "vast majority" of countries will comply with the USA request.

Thus, collectively all countries should raise production by 1 mln barrels per day.

Some major importers of Iranian crude have sent mixed signals on their willingness to abide United States sanctions, particularly as inventories remain low.

Saudi Arabia, the world's top crude exporter, said on Tuesday it was prepared to use its spare production capacity, estimated at two million barrels, to balance the global oil market.

Immediately after the moot, the US Energy Secretary Rick Perry emphasised that the deal between global oil producers to boost crude output was not enough to relieve global oil markets that are stressed by supply constraints.

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