After ministers of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC independent producers finished their meeting in Jeddah and attended a luncheon, US President Donald Trump bashed on oil prices, which he considered "artificially" high.
“Looks like OPEC is at it again. 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!” Trump Tweeted.
Energy ministers, including Russian Minister Alexander Novak and OPEC Secretary General Mohammed Barkindo, defended their position strongly, saying that without OPEC, the US oil industry could not continue its production, given that US producers are the first to benefit from high prices.
The Russian minister said that prices are determined by the market.
UAE Energy Minister Suhail al-Mazroui, who heads OPEC's ministerial conference this year, told reporters after lunch that there was no such thing as artificial prices.
The Joint OPEC/Non-OPEC Ministerial Monitoring Committee (JMMC), which monitors the deal, met on Friday in Jeddah, Saudi Arabia, to discuss producers' commitment to implementing a cut-off agreement and discuss prices.
Following the meeting, OPEC issued a statement announcing that, based on the Report of the Joint Technical Committee (JTC) for the month of March 2018, following successive months of record-breaking performances, OPEC and participating non-OPEC countries have achieved a conformity level of 149 percent with their voluntary production adjustments, the highest level so far.
The meeting reviewed the developments in the oil markets and levels of production of the participating countries, the work of the committee and the results of decisions issued in the previous meetings.
It is noteworthy that JMMC hold a meeting every two months under the chairmanship of the Kingdom, to discuss the commitment of countries to the agreement, which includes Kuwait, Venezuela, Algeria, Saudi Arabia, Russia and Oman.
OPEC Sec-Gen Mohammad Barkindo said members of the oil producers group were friends of the US and have a vested interest in its growth and prosperity.
Barkindo made his remarks after Trump sent a tweet criticizing OPEC over high oil prices.
"The Declaration of Cooperation by 24 producing countries in Dec. 2016 which was implemented faithfully since 2017 has not only arrested the decline but rescued the oil industry from imminent collapse," Barkindo said.
Iraqi Oil Minister Jabar al-Luaibi said oil prices are “not very high” following Trump's tweet. “Everything is now fine and the market is stabilizing,” Luaibi told the press.
UAE Energy Minister Suhail Mohamad al-Mazrouei also said oil prices were not artificially high.
Oil prices fell after the US president criticized OPEC, but it is still heading for a weekly gain.
Brent crude oil futures LCOc1 gained 28 cents, or 0.4 percent, to settle at $74.06 per barrel. West Texas Intermediate crude futures CLc2 for delivery in June, the most active US contract, were up 7 cents at $68.40. The May WTI contract, which expired on Friday, CLc1 gained 9 cents, or 0.1 percent, to settle at $68.38.
The United States can only legitimately influence oil by withdrawing from its strategic reserve, which it has done from time to time.
Saudi Energy Minister Khalid al-Falih said OPEC and its allies were far from reaching their goal and that the reduction of oil stocks needs to continue.
"The countries involved in the reduction of oil production have shown a commitment to seeking a balance in the global oil market where the levels of the OECD's trade stock have been adjusted from a peak of 3.12 billion barrels in July 2016 to 2.83 billion barrels in March 2018, a decrease of 300 million barrels," Falih was quoted by Saudi Press Agency (SPA).
Falih expressed his appreciation to the importance of Russia's role in the declaration of cooperation describing Russia as an effective element in reaching the agreement and its success over the past months. He also praised the important role played by the Russian Energy Minister who co-chaired the JMMC since its inception at the beginning of 2017.
Falih stressed the importance of monitoring the market and the commitment of the oil-producing countries, indicating that the success achieved at the level of the Joint Ministerial Committee to monitor oil production in 2017 will be going on in 2018.
Aside from OPEC's supply management, crude prices also received support from expectations that the US would re-impose sanctions on Iran, a member of the organization.
OPEC and non-OPEC oil producers could begin easing up on output curbs before the end of the year, according to Russian Energy Minister Alexander Novak.
“The agreement lasts until the end of the year. In June, we can discuss, among other issues, a question about reduction of some quotas during this time, if it is expedient from the market’s point of view,” Novak said ahead of the JMMC meeting, TASS news agency reported.
Sources familiar with the meeting told Reuters that Novak told his OPEC and non-OPEC counterparts in a closed-door meeting that Moscow was committed to the deal on cutting output until the end of 2018.
The OPEC, non-OPEC ministerial panel said commercial oil stock levels of Organisation for Economic Co-operation and Development (OECD) were 2.83 billion bbl in March 2018, still above the level seen before the oil market downturn.
Three industry informed sources stated this week Saudi Arabia would be happy to see crude rise to $80 or even $100 a barrel indicating Riyadh will likely seek no changes to the deal in June.
Energy Minister Falih said OPEC and non-OPEC compliance with the output deal reached 149 percent in March. The deal’s success has helped relations between Russia and Saudi Arabia.
Germany’s Handelsblatt newspaper reported on Friday UAE oil minister Mazrouei saying that he believes more oil producers need to join OPEC and non-OPEC producers in curbing supply.
