The national average U.S. gasoline price is actually still rising, and sources denied that several high-level OPEC and Saudi officials spoke to Trump.
Trump’s remarks triggered a selloff, putting at least a temporary ceiling on a 40 percent price rally in oil prices since the start of the year.
The rally had gained momentum in April after Trump tightened sanctions against Iran by ending all exemptions that major buyers, especially in Asia, previously had.
U.S. sanctions on Venezuela are also working to tighten global supply as fighting in Libya threatens to curb output there as well.
“We are dealing with a market that’s not actually short of supply but is short due to politically-motivated action, and we know how quickly that can be turned around if necessary,” Saxo Bank analyst Ole Hansen told Reuters.
“Being a bear in the market is a very lonely place now.”
Traders said the market was shifting its focus to the voluntary supply cuts led by OPEC, de facto headed by the world’s top exporter Saudi Arabia.
“We are of the view that Saudi Arabia will increase output as soon as May, something they were likely to do anyway in the lead up to summer,” ING bank said. “The Kingdom could increase output by 500 million barrels per day (bpd) and still be in compliance with the OPEC+ deal for the month of May.”
The cuts have been supported by some non-OPEC producers, notably Russia, but analysts said this cooperation may not last beyond a meeting between OPEC and its other allies, a group known as OPEC+, scheduled for June.
Russia has said it would be able to meet China’s oil demand needs as Beijing tries to replace the imports it usually gets from Iran.
“Russia appears to have every reason to resume ramping up production levels and the base case should start to become (that) we will not see OPEC+ agree upon extending production cuts, with tweaks to cover the shortfall from Iran,” said Edward Moya, senior analyst at futures brokerage OANDA.
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