US Sought Saudi Oil Support before Iran Move

The national consumer watchdog has said Australian motorists are directly paying for the extravagance of oil-rich Middle Eastern nations

In the previous round of sanctions against Tehran, in which the European Union had taken part, Iranian oil exports plummeted by more than half to below 1 million barrels per day.

West Texas Intermediate for July delivery fell 46 cents to US$65.06 a barrel on the New York Mercantile Exchange as of 8.41am local time.

Iran and Venezuela are now the two key oil supply concerns globally that supported the oil price rally in recent weeks, before Saudi Arabia and Russian Federation hinted at discussions that they were considering reversing some of the cuts to offset production losses and "ease market and consumer anxiety".

Oil prices fell on Wednesday on signs Saudi Arabia and other big producers may increase production, and US crude slid more than 1 percent on a surprise build in domestic crude stockpiles.

Crude oil prices are continuing to diverge as global benchmarks rise relative to land locked WTI.

The group is due to meet at its headquarters in Vienna, together with top producer but non-OPEC member Russian Federation, on June 22 to discuss production policy.

The U.S. request was widely known among industry weatchers.

Oil prices hit a 3-1/2-year high of $80 per barrel in mid-May on concerns about a possible supply shortage fueled by new US sanctions against OPEC member Iran. Significant volumes of crude oil were also exported to Europe, which increased its imports from OPEC member countries from 4.40 mb/d in 2016 to 4.64 mb/d in 2017.

"Venezuela's worsening economic crisis, together with ongoing geopolitical tensions in the Middle East, will remain supportive of oil prices", Abhishek Kumar, Interfax Energy senior analyst said.

The United States government has weighed in on the decision by putting in unofficial requests to Saudi Arabia and some other OPEC producers to increase output, sources said on Tuesday.

The organization reduced by about 1.2 million barrels per day.

The huge increase in production in the U.S.is capping prices and increasing demand for USA crude oil outside the United States.

Oil prices fell on Wednesday on worries that global supply is climbing after USA inventories rose unexpectedly and Saudi Arabia and other big producers signalled that they may increase output.

OUT OF SYNC Despite this, oil markets are not unanimously bullish.

"This seems to be an intervention in OPEC's supply policy ..."

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