The world's largest exporter has tried to keep crude from trading above $80 so far this year, in part because U.S. President Donald Trump sent several tweets in May and June calling for OPEC to rein in prices as they flirted with that level.
Bloomberg reported Tuesday, citing unnamed Saudi sources, the kingdom was now comfortable with prices above $80 per barrel, at least for the short-term. The Joint Ministerial Monitoring Committee includes both OPEC and non-OPEC countries and oversees compliance with the production cuts agreed to in late 2016, meeting every three months.
Brent futures LCOc1 also rose but the gains were more muted, as the global benchmark ended 37 cents, or 0.5 percent, higher at $79.40 a barrel. Saudi Arabia's share of total OPEC net oil export revenues was almost 30% in 2017, and it has remained relatively consistent since at least 1996, ranging between 28% and 34%.
"Mr. Trump's attempt to prevent Iran from appearing on the global crude oil markets has allowed Russian Federation and Saudi Arabia, which would not favor low prices, to pursue hostage-taking policies in the market", Iranian OPEC governor Hossein Kazempour Ardebili said on Saturday. It's unclear, however, whether the Saudis discussed prices with Russian and American officials.
Oil prices were steady on Wednesday as concerns that producers will not be able to respond to a shortfall in supply once USA sanctions on Iran are enacted outweighed a gain in stockpiles in the United States, the world's biggest oil user.
Opec with a group of non-Opec producers that includes Russian Federation started withholding oil supplies in 2017 to end a global glut and prop up prices.
United States crude inventories rose by 1.2 million barrels to 397.1 million in the week to Sept 14, according to data released on Tuesday by the American Petroleum Institute (API). "If Venezuelan and Iranian exports do continue to fall, markets could tighten and oil prices could rise".
A pump jack operates at sunset in an oil field in Midland, Texas U.S. August 22, 2018.
Prices pared gains in post-settlement trade after data from industry group the American Petroleum Institute showed US crude inventories rose by 1.2 million barrels in the week to September 14 to 397.1 million, compared with analysts' expectations for a decrease of 2.7 million barrels.
The warning came from the group's top official as looming unilateral US sanctions on oil sales by Iran, OPEC's third-biggest supplier, are scheduled to take effect on November 4.