Trump blasts OPEC, sending oil prices lower: 'Monopoly must get prices down now'

  • President Donald Trump says OPEC "must get prices down now" in a tweet before the cartel's meeting with other oil producers this weekend.
  • Trump has demanded OPEC tame oil prices several times this year as his administration restores sanctions on Iran, the group's third largest oil producer.
  • OPEC is partnering with Russia and other producers to limit output in order to stabilize oil prices after a prolonged and punishing downturn.

President Donald Trump tweeted on Thursday the Organization of the Petroleum Exporting Countries needs to keep crude prices lower because of the military protection the U.S. provides for the region.

"The OPEC monopoly must get prices down now," Trump said in the message.

Futures prices for West Texas Intermediate crude, the U.S. benchmark, dipped slightly following the tweet before recovering and then retreating once again to trade roughly flat. On Wednesday, WTI climbed back above $70 a barrel. The price of oil is up 7 percent in the last month and nearly 18 percent for 2018.

The cartel, which includes Saudi Arabia and Iran, will meet this weekend with non-OPEC producers such as Russia to discuss production levels. That will be the last meeting before the November U.S. midterm elections.

Trump has called on OPEC to take action to lower oil prices several times this year. The 15-member cartel, along with the Russia-led producers, has capped output since January 2017 in order to end a prolonged and punishing oil price downturn that bankrupted hundreds of U.S. energy companies and heaped financial pressure on crude exporters.

The rebound gained steam earlier this year after production problems in countries like Venezuela and Libya caused the group to cut more deeply than they intended. The Trump administration also boosted prices by restoring sanctions on Iran, OPEC's third biggest producer, and saying it aims to cut the nation's exports to zero by November.

OPEC and Russia's alliance of roughly two dozen producers agreed in June to slightly raise output and restore some of the barrels they took off the market, in part to compensate for the loss of the Iranian supplies.

Despite that, oil prices have moved back towards four-year highs near $80 a barrel for international benchmark Brent crude and above $70 for WTI. The average cost of gasoline has also remained stuck at multi-year highs at roughly $2.85 a gallon and shows few signs of falling before Americans go to the polls in November.

The Trump administration set a deadline for oil buyers to cut imports from Iran for Nov. 4, just two days before the midterm elections.

Trump incorrectly referred to OPEC as a monopoly in his tweet. The group of 15 producer nations together account for about one-third of the world's oil supply.

The president's claim that OPEC members "continue to push for higher and higher oil prices" is also questionable. A major factor in OPEC's decision in June to hike output was its concern that demand for oil would begin to suffer if prices rose much above $80 a barrel.