Trump renews attack on OPEC, says oil prices too high

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The group now has a deal with Russian Federation, also a major oil exporter, to limit the supply of oil after a drastic fall in price over the past couple of years, which recently began to recover-triggering a backlash from Trump.

There are now fears that prices could rise steeply if supplies are disrupted from OPEC members Venezuela and Iran.

"We are concerned about tight spare capacity nowadays", Saudi Energy Minister Khalid al-Falih told Reuters last month, although he also said the industry was in "better shape" than in 2016 when oil prices plunged below $30 a barrel.

The country, which is suffering from crushing debt, hyperinflation, labor troubles and crumbling oil infrastructure, has been the leading contributor - albeit unwillingly - to OPEC's overcompliance with its committed cuts, which has tightened the market faster than many observers had anticipated when the deal began in January 2017. "Adjusted for inflation, these prices are not out of line with where we've seen oil prices for the last decade or two". "In this context, any geopolitical event can create a price spike".

A USA decision to pull out from an global nuclear deal with Iran and reimpose sanctions helped prices climb to their highest since 2014.

All the nations would proportionally share out a 1.8 MMbpd increase to their output limit starting as soon as July, the person said, asking not to be identified because the information isn't public.

Drawdowns "in crude oil inventories, healthy oil demand and geo-political developments have supported this rising trend", OPEC said.

Oil prices fell on Wednesday, pulled down by rising supplies in the United States and expectations that voluntary production cuts led by producer cartel OPEC could be loosened. On Tuesday, Brent oil stood at almost $76.

The alliance meets on June 22-23 in Vienna, where it is expected to come to a decision on output.

The country boosted production after the USA lifted sanctions related to Iran's nuclear program in 2016, but analysts expect output to fall when the Trump administration's decision to withdraw from the deal takes full effect later this year.

"Growing risks of greater disruptions in Venezuela and Iran speak to the group lifting volumes", said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.

Because the cuts have gone deeper than intended, overall supply from the group would still be about 1 MMbpd below the pre-cuts levels even after the 1.8 MMbbl quota increase, the person said.

Consultancy Energy Aspects said Gulf OPEC members would likely add less than 1 million bpd immediately, rising to about 1.5 million bpd in three to six months.

On the demand side, the EIA expects USA oil consumption growth in 2018 to rise by 530,000 bpd to 20.41 million bpd compared with a previous forecast of a rise of 500,000 bpd to 20.38 million bpd. Saudi Arabia says it is ready to temper prices by raising supply.

Kuwait's output dropped to 2.7 million bpd in May from 2.705 million bpd in April while Ecuador recorded a decrease of 1,000 bpd to 516,000 bpd in May.

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