NEW YORK (Reuters) - Oil futures were near flat on Thursday after recovering from the day’s worst losses that came when U.S. President Donald Trump called for OPEC to boost crude output in an effort to lower prices that were headed for their best quarterly gains in a decade.
Futures hit a session low immediately following Trump’s comments, but subsequently rallied above pre-tweet levels.
U.S. West Texas Intermediate (WTI) crude futures dropped 11 cents to settle at $59.30 a barrel. Earlier the contract fell to $58.20 in the wake of Trump’s tweet, where he said it was “very important that OPEC (the Organization of the Petroleum Exporting Countries) increase the flow of Oil” due to fragile world markets.
Brent crude futures lost 1 cent to settle at $67.82 a barrel, after earlier sinking to $66.54 a barrel.
Oil prices have risen more than 25 percent this year, with WTI heading for the biggest first quarter gains since 2002 and for both benchmarks the best quarterly gain since 2009, mainly due to moves by OPEC and allies such as Russia to cut output.
The group, known as OPEC+, agreed to cut 1.2 million barrels per day of output at the beginning of this year.
“These Trump tweets where he ambushes the OPEC folks are not having the same kind of price significance that they did when it was a brand-new phenomenon,” said Bob Yawger, director of futures at Mizuho in New York.
“The market is finding this a bit old and it’s not a novelty anymore.”
Sowing uncertainty for the OPEC-led pact, Saudi Arabia is having a hard time convincing Russia to stay much longer in the deal, and Moscow may agree only to a three-month extension, three sources familiar with the matter said.
U.S. sanctions on Venezuela and Iran have restricted those countries’ oil exports and buoyed crude prices this year.
The United States has instructed oil trading houses and refiners around the world to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published U.S. sanctions, three sources familiar with the matter said.
On top of U.S. sanctions, power blackouts this month have crippled Venezuela’s oil industry. The country’s main oil export port of Jose and four crude upgraders, needed to convert Venezuela’s heavy oil into exportable grades, were halted this week, industry sources said.
“If the unplanned supply cuts remain in place” oil prices could hit $75 a barrel as inventories fall, PVM’s Tamas Varga said in a note.
Demand concerns on the back of economic jitters linked to the U.S.-Chinese trade war have capped prices.
China has pledged to further open its massive financial markets to foreign investors as senior U.S. officials arrived in Beijing for more trade talks.
Reporting by Stephanie Kelly; additional reporting Shadia Nasralla in London, Colin Packham in Sydney and Koustav Samanta in Singapore; Editing by Marguerita Choy and Lisa Shumaker