Oil prices slip as production rises

Oil prices drop as supplies increase

Iran, Venezuela supply gap to dominate OPEC meet: IEA

Pumped further by global trade war fears, oil prices have since surged to multi-year highs, only to then fall back again somewhat, the IEA said.

"The prospect of easing supply curbs from OPEC-led producers continues to be reflected in oil's overall depressed price", said Lukman Otunuga, analyst at futures brokerage FXTM.

The world's largest oil exporters are negotiating how to rework their unprecedented, and successful, deal to control oil production as US sanctions on Iran and the collapse of the Venezuelan petroleum industry threaten to send crude skyrocketing.

Traders are holding their breath for the June 22 meeting of oil ministers from Opec member states in Vienna.

Iran's OPEC governor, Hossein Kazempour Ardebili, fired back quickly at Trump's words. On April 20, Donald Trump took to Twitter to lambaste the cartel's push for higher prices.

Rising oil output by the world's third biggest producer, the U.S., is also affecting prices. The calculus changed, however, after Trump announced in May that the United States was pulling out of the 2015 deal that restricted Iran's nuclear program in exchange for the removal of sanctions.

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Yet, even with the 1.8 million-bpd production rollback, the total OPEC/non-OPEC level would still be around 1 million bpd below the October 2016 levels, because some producers, notably Saudi Arabia, have cut more than intended, while others, most notably Venezuela, have seen involuntary production declines and are unable to lift production, the person told Bloomberg.

The U.S. move has put pressure on European and Asian clients to stop importing Iranian oil or doing business with the country.

The Organization of the Petroleum Exporting Countries and some non-OPEC producers, led by Russian Federation, agreed to cut output in 2017 to reduce a supply overhang, which has led to a 60 percent spike in oil prices over the past year.

However, it is unclear whether other nations will commit to raising production.

Trump sent out his tweet hours after returning to Washington from a summit with North Korean leader Kim Jong Un in Singapore and it was not immediately clear what prompted his comment.

Oil prices turned positive on Wednesday after a bigger-than-expected decline in US crude inventories along with surprise drawdowns in gasoline and distillates indicated strong demand in the world's top oil consumer.

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