Oil dips a little after Trump outburst, but still rules high

Oil prices fell on Friday after US President Donald Trump criticised the Organisation of Petroleum Exporting Countries (OPEC) and said oil prices were artificially high, but they were still set for a weekly gain.

Brent crude oil futures were at $73.26 per barrel at 1139 GMT, down 52 cents from their last close, while US West Texas Intermediate (WTI) crude futures were down 48 cents at $67.81 a barrel.

Saudi Arabia's energy minister Khaled al-Faleh said earlier on Friday the global market has the capacity to absorb higher oil prices, drawing a swift reaction from President Trump, who accused OPEC of inflating prices.

Faleh's statement at a meeting of oil producers in Saudi Arabia came as crude hit the highest level in more than three years.

"Looks like OPEC is at it again," Trump tweeted.

"With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!"

Both contracts had been trading in positive territory before Trump's tweet.

Oil has rebounded to over $70 a barrel, after prices crashed to as low as $26 in January 2016.

"I have not seen any impact on demand with current prices," Faleh told reporters, ahead of a ministerial committee for OPEC and non-OPEC producers.

"Reduced energy intensity and higher productivity globally of energy input leads me to think that there is the capacity to absorb higher prices," he said.

The United States cannot legally influence oil other than through releasing oil from its strategic reserves which it has done occasionally, most recently last year in the wake of Tropical Storm Harvey.

Brent and WTI hit their highest levels since November 2014 on Thursday earlier this week, at $74.75 and $69.56 per barrel respectively, buoyed by a tightening market and higher demand.

Saudi oil minister Khalid al-Falih said OPEC and its allies were still far away from reaching their target and that a drawdown in oil inventories needed to continue.

OPEC and its allies have been curbing production since 2017, helping push up prices. The deal to cut is currently scheduled to expire at the end of 2018.

A technical OPEC and non-OPEC committee meeting in Jeddah on Thursday, ahead of Friday's ministerial meeting, found that a global overhang in oil inventories, which the deal has targeted for eliminating, has virtually disappeared.

"Global oil demand data so far in 2018 has come in line with our optimistic expectations, with Q1 2018 likely to post the strongest year-on-year growth since Q4 2010 at 2.55 million barrels per day," US bank Goldman Sachs said in a note published late on Thursday.

Apart from OPEC's supply management, crude prices have also been supported by an expectation that the United States will re-introduce sanctions on OPEC member Iran.