LONDON: Oil prices steadied on Thursday after US President Donald Trump called on Opec to “get prices down now!”, slowing an upward surge that has pushed the market towards four-year highs.

Brent crude oil was down 20 cents at $79.20 a barrel by 1340 GMT. US light crude oil was up 30 cents at $71.42 a barrel after rising nearly 2 per cent on Wednesday.

The North Sea benchmark has been trading close to $80 a barrel, near its highest for almost four years, on expectations that US sanctions against Iran, Opec’s third biggest producer, will reduce supply in world markets.

The US sanctions were imposed by Trump in response to Iran’s nuclear programme, which the White House says is designed to produce weapons, an allegation Tehran denies.

The Organisation of the Petroleum Exporting Countries (Opec) 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 on Thursday, urging Opec to cut prices.

“The Opec monopoly must get prices down now!,” Trump said.

“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.”

Despite the president’s intervention, market sentiment remained bullish with many traders and analysts expecting 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.”

BNP Paribas oil strategist Harry Tchilinguirian agreed, telling 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.”

US crude oil stockpiles fell for a fifth straight week to 3-1/2 year lows in the week to Sept. 14, while gasoline inventories also showed a larger than expected draw on unseasonably strong demand, the Energy Information Administration said on Wednesday.

Crude inventories fell by 2.1 million barrels, compared with expectations for a decrease of 2.7m barrels.

US sanctions on Iran’s oil exports come into force on Nov 4 and many buyers have already scaled back Iranian purchases.

It is unclear how easily other producers, such as Saudi Arabia, Iraq and Russia, can compensate for lost supply.

Published in Dawn, September 21st, 2018