Saudi Arabia not confirming Trump's 2M barrels

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Trump implied on Twitter that he had asked the king in a phone call to increase oil production in hopes of greater supply bringing costs down in the United States, which have risen since America stopped importing Iranian oil.

"Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & dysfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference", Trump announced in an early morning tweet.

Saudi Arabia, backed by non-member Russian Federation, had argued strongly in favor of increasing production as grumbles in major consumer countries like the United States, India and China have grown about higher prices. Prices to (sic) high!

According to the report, the two leaders also spoke about efforts of oil producing countries to compensate for any potential shortage of supply. It did not elaborate.

The Trump administration is pushing countries to cut all imports of Iranian oil from November when the United States re-imposes sanctions against Tehran, after Trump withdrew from a 2015 nuclear deal agreed between Iran and six major powers.

Benchmark Brent crude LCOc1 was around $79 a barrel on Friday and a Reuters poll showed prices look to remain strong for the rest of this year due to supply disruptions in countries including Libya and Venezuela and the extra oil from OPEC fails to meet rising demand.

Last week, members of the Organization of the Petroleum Exporting Countries cartel led by Saudi Arabia and non-cartel members agreed to pump one million barrels more crude oil per day, a move that should help contain the recent rise in global energy prices. Saudi Energy Minister Khalid Al-Falih indicated the group's action would add almost 1 million bpd to the market. "These higher oil prices are translating directly to soaring gas prices, something we know hurts middle- and lower-income people".

Other analysts were more doubtful about immediate effects.

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"This will push the system close to the limit", FGE further, emphasized, noting that spare production capacity could fall below 2 million barrels a day - a level previously associated with $100 per barrel prices. The agency didn't say the leaders agreed and didn't make any reference to 2 million barrels.

"I guess the Saudis want to give the confidence to Trump to go very hardcore on Iran", tweeted the oil market's most vocal bull, commodities hedge-fund manager Pierre Andurand.

The curbs were meant to help drain a global oil glut, a goal that has largely been achieved, though supply disruptions are now adding pressure to prices.

"The Trump support base is probably the part of the US electorate that will be the most sensitive to an increase in USA gasoline prices", Halff said.

The Trump administration has been counting on Saudi Arabia and other OPEC members to supply enough oil to offset the lost Iranian exports and prevent oil prices from rising sharply.

"Saudi Arabia obviously can deliver as much as the market would need, but we're going to be respectful of the one-million-barrel cap - and at the same time be respectful of allocating some of that to countries that deliver it", al-Falih said then. That's about 24 percent higher than a year ago.

The US state department has claimed that it expects the "vast majority" of world nations will comply with Washington's demand to boycott Iran's oil.

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