Saudi Arabia 'ready to use spare oil capacity when needed'

Saudi Arabia 'ready to use spare oil capacity when needed'

"Our attempt is to defeat USA policies in the sale of oil and we are pretty sure we will sell our oil as much as we need", he added. Rising gasoline prices could create a political headache for Trump before the November mid-term congressional elections by offsetting Republican claims that his tax cuts and rollbacks of federal regulations have helped boost the US economy.

Monday saw a downturn in global oil prices; the price of Benchmark Brent crude oil fell 0.8 percent to 78.54 dollars and West Texas Intermediate ebbed 0.25 percent, to 73.95 dollars.

Monica Malik, chief economist, Abu Dhabi Commercial Bank, welcomed the UAE's decision to hike output later this year as it will bring stability in the oil market and also improve government revenues from hydrocarbon sector.

"Saudi Arabia's readiness to utilize its spare production capacity which is estimated at 2 million barrels could spell trouble for oil bulls down the road", Lukman Otunuga, research analyst at FXTM, told Arab News.

The White House later walked back the president's comments, saying the king said his country can raise oil production if needed.

In a tweet on Saturday, Trump said the extra Saudi oil would help offset a decline in supply from Iran.

After leading the Organization of Petroleum Exporting Countries and its allies to cut production at the start of past year, the kingdom has seen its hold on the world's top oil consuming region reduced as rivals from the Iran boost exports. The decision comes in the wake of rising price of oil in the global market due to supply issues from Iran.

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The drop is in contrast to the strong growth in oil prices seen last week as prices started to nudge close to $80 per barrel. The UAE, Kuwait and Saudi Arabia agreed an aid package for Jordan of $2.5 billion.

But a flurry of USA announcements over the weekend unsettled oil markets.

"We do not know what the reaction of Russian Federation and other OPEC member countries will be regarding the violation of the agreement by Saudi Arabia".

As a result of those sanctions, companies that do business with Iran could face penalties from the U.S. It was previously unclear if the U.S. would penalize European nations that chose to remain in the Obama-era agreement.

Abu Dhabi said it's ready to increase oil output in line with guidance set by OPEC and allied producers. "Since Venezuela and Libya failed to produce, OPEC countries chose to increase their output by one million barrels to compensate", Sonatrach's CEO noted, adding: "This is why prices stand at the same level".

According to the Reuters survey, the Saudi allies in the Gulf-the UAE and Kuwait-maintained steady production in June compared to May, so they have yet to increase production following the Saudi lead.

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