Global oil prices dropped extending its earlier losses after the US demanded that the oil cartel Organization of the Petroleum Exporting Countries (OPEC) increase its output.
The US administration pressed OPEC in order to mitigate the impact its sanctions on Iran may have on regular supplies. Brent crude futures slumped 56 cents to $71.59 per barrel, while US West Texas Intermediate (WTI) crude futures fell 37 cents to trade at $62.93 a barrel, Reuters reported.
Earlier, US President Donald Trump told reporters that he has asked OPEC to lower oil prices. Later, he tweeted: “Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement.”
The announcement caused a selloff in the oil market, which rallied by nearly 40% since the start of 2019.
Global oil prices increased last week, touching $75 a barrel, after the US announced its decision to further tighten sanctions against Iran by terminating all waivers on Iranian crude imports.
ING bank told Reuters: “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.
“The Kingdom (Saudi Arabia) could increase output by 500 million barrels per day (bpd) and still be in compliance with the OPEC+ deal for the month of May.”
OPEC and other producers, known as OPEC+, have reduced supplies in 2019 to prop up the market. The participants will meet in June to decide future output policy.