Saudi Arabia minister says OPEC deal to gradually boost oil output ‘inevitable’

Futures in New York dropped as much as 1.3% after the American Petroleum Institute was said to report nationwide crude inventories rose last week

"You can not place sanctions on two OPEC founder members and still blame OPEC for oil price volatility", he said in a statement to Reuters, referring to his country and Venezuela.

OPEC's top producer, Saudi Arabia, topped the output-rise table among members, with its production growing to 10.01 million b/d in May, the survey found. "Not good!" Trump wrote in a post on Twitter. "Oil prices are artificially Very High!"

After nearly 18 months of an OPEC and non-OPEC deal to cut production, Saudi Arabia and Russian Federation have said they are prepared to pump more to calm consumer worries about supply and prices, which hit $80 a barrel, the highest since 2014. Year-to-date at the end of May, crude oil prices are 30 per cent higher than in the same period last year, with ICE Brent averaging above $70/b for the first time since 2014. In addition to this, the new arrival of fracking firms in the United States led to pumping huge quantities of oil and gas, thus impelling more price fall.

U.S. President Donald Trump and Iran exchanged sharp words over oil prices, with Trump blaming OPEC for high oil prices and Tehran accusing him of stoking volatility after he withdrew last month from a global nuclear arms deal with Iran. The US is said to have lobbied Saudi Arabia and other members, arguing they need to raise output by 1 million barrels a day to keep prices in check.

"The demand metrics here are unbelievable for crude oil and gasoline", said John Kilduff, a partner at Again Capital in New York, Reuters reported.

West Texas Intermediate, the US benchmark for the price of oil, was up 0.72 percent to $67.12 per barrel.

"More oil from OPEC+ is the base case", said Bjarne Schieldrop, analyst at Swedish bank SEB.

US West Texas Intermediate (WTI) crude futures were at $65.99 a barrel, down 37c or 0.6% from their last settlement.

OPEC will probably overcome internal disputes to agree on a production increase next week, a Bloomberg survey shows.

The International Energy Agency (IEA) expects the global crude oil demand to go up by 1.4 mln barrels per day in 2019.

The International Energy Agency - which advises consuming nations - said earlier Wednesday that output from Iran and Venezuela could drop by 1.5 million barrels a day, or nearly 30 percent, by the end of next year because of us sanctions and economic upheaval.

"The U.S.is important to us, but. we have not received any official communication, or even unofficial communication, from the administration", he told CNN.

The US has reportedly asked Saudi Arabia and others to relax output restraints put in place in early 2017 as prices near US$80 a barrel pose a threat to economic growth.

The IEA, which coordinates the energy policies of industrialised nations, said stocks in developed countries fell to their five-year average - a metric used by Opec to measure the success of the output cuts.

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