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US crude dips 32 cents, settling at $70.80, after Trump's latest Twitter warning to OPEC

Key Points
  • Oil prices slip after U.S. President Donald Trump called on OPEC to "get prices down now!" ahead of a meeting of major oil exporters.
  • OPEC and other producers, including Russia, meet on Sunday to discuss how to allocate supply increases to offset the loss of Iranian barrels due to U.S. sanctions.
  • U.S. crude oil stockpiles fell for a fifth straight week to 3.5-year lows in the week to Sept. 14, the Energy Information Administration said on Wednesday.
Trump blasts 'The OPEC monopoly' over high oil prices

Oil prices eased on Thursday, slowing an upward surge that had pushed the market toward four-year highs, after U.S. President Donald Trump called on OPEC to "get prices down now!"

Global benchmark Brent crude was down by 80 cents at $78.60 by 2:27 p.m. ET, after gaining half-a-percent on Wednesday.

U.S. West Texas Intermediate crude ended Thursday's session down 38 cents at $70.80 a barrel, after rising nearly 2 percent the previous session.

Global benchmark Brent has been trading just below $80 a barrel, near its highest for almost four years, on expectations that U.S. sanctions against Iran, OPEC's third biggest producer, will reduce supply in world markets.

"We're stuck in a range here," said Tariq Zahir, managing member at Tyche Capital Advisors in New York, with prices supported by sanctions on Iranian supplies and pressured by the potential Chinese demand could wane.

The U.S. sanctions were imposed by Trump in response to Iran's nuclear program, which the White House says is designed to produce weapons, an allegation Tehran denies.

The Organization of the Petroleum Exporting Countries and other producers, including Russia, meet on Sunday in Algeria to discuss how to allocate supply increases to offset the loss of Iranian barrels.

The meeting is unlikely to agree an official rise in crude output, although pressure is mounting on top producers to prevent a spike in prices.

Trump weighed into the debate via Twitter, saying "The OPEC monopoly must get prices down now!"

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember."

In the range-bound market, Trump's tweets may drive prices down slightly, said Tyche's Zahir, predicting that such tweets would probably continue with U.S. midterm elections approaching.

"The last thing that he is going to want to have happen is diesel prices and oil prices hitting highs when people are going to the voting booth," Zahir said.

Still, many traders and analysts expect Brent to move above $80 soon.

"Brent is definitely fighting the $80 line, wanting to break above," said SEB Markets chief commodities analyst Bjarne Schieldrop. "But this is likely going to break very soon."

Can the under-the-radar rally in energy continue?

U.S. sanctions on Iran's oil exports come into force on Nov. 4. Many buyers have already scaled back Iranian purchases, and it was unclear how easily other producers, such as Saudi Arabia, Iraq and Russia, can compensate for lost supply.

BNP Paribas oil strategist Harry Tchilinguirian told Reuters Global Oil Forum: "$80-per-barrel Brent is a psychological level, and unsurprisingly, as we approach it, it gets sold into as some market participants take profit."

"As more evidence gathers that Iranian oil exports are heading sharply down, the more emboldened the oil market is likely to be to test, and breach this level."

— CNBC's Tom DiChristopher contributed to this report.