Trump criticises Opec, says will not accept high oil prices; crude dips

Crude prices have also been supported by an expectation that the US will re-introduce sanctions on OPEC-member Iran

Oil prices fell on Friday after US President Donald Trump criticised OPEC and said oil prices were artificially high, but they were still set for a weekly gain. This is what the US president tweeted: 

Brent crude oil futures were at $73.26 per barrel at 1139 GMT, down 52 cents from their last close. US West Texas Intermediate (WTI) crude futures were down 48 cents at $67.81 a barrel. 

"With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!" The United States cannot legally influence oil other than through releasing oil from its strategic reserves which it has done occasionally, most recently last year in the wake of Tropical Storm Harvey.

Both contracts had been trading in positive territory before Trump's tweet. Brent and WTI hit their highest levels since November 2014 on Thursday earlier this week, at $74.75 and $69.56 per barrel respectively, buoyed by a tightening market and higher demand.

Saudi oil minister Khalid al-Falih said OPEC and its allies were still far away from reaching their target and that a drawdown in oil inventories needed to continue. OPEC and its allies have been curbing production since 2017, helping push up prices. The deal to cut is currently scheduled to expire at the end of 2018.

A technical OPEC and non-OPEC committee meeting in Jeddah on Thursday, ahead of Friday's ministerial meeting, found that a global overhang in oil inventories, which the deal has targeted for eliminating, has virtually disappeared.

"Even if OPEC were to reach its target of reducing oil inventories to their recent five-year average by the next official June meeting, Saudi Arabia is driving a strong agenda to maintain cuts for the balance of 2018," BNP Paribas global head of commodity market strategy Harry Tchilinguirian told the Reuters Global Oil Forum. Firm demand was also giving prices a floor.

"Global oil demand data so far in 2018 has come in line with our optimistic expectations, with Q1 2018 likely to post the strongest year-on-year growth since Q4 2010 at 2.55 million barrels per day," US bank Goldman Sachs said in a note published late on Thursday.

Beyond OPEC's supply management, crude prices have also been supported by an expectation that the United States will re-introduce sanctions on OPEC-member Iran. "The first key geopolitical issue is the expiration of the current US waiver of key sanctions against Iran," said Standard Chartered Bank in a note this week.