Oil prices tumbled more than 3 percent on Friday after U.S. President Donald Trump again pressured the Organization of the Petroleum Exporting Countries to raise crude production to ease gasoline prices.
Profit-taking from the oil market’s strongest bull run in at least a year also pushed prices through technical stops which accelerated the decline, analysts said.
Brent crude futures dropped $2.64, or 3.6 percent, to $71.71 a barrel by 12:05 p.m. West Texas Intermediate crude fell $2.39, or 3.7 percent, to $62.82 a barrel, a three-week low.
Brent was poised to lose 0.4 percent on the week, while WTI was headed for a 1.8 percent weekly loss.
Crude futures had rallied about 40 percent higher this year after OPEC and several allies cut supply by 1.2 million barrels per day, and as sanctions on Venezuela and Iran have reduced output. Prices were now up more than 30 percent this year after Friday’s losses.
On Thursday, Brent rose above $75 a barrel for the first time this year after Germany, Poland and Slovakia suspended imports of Russian crude via a major pipeline due to contamination. Russia said it expects to resume pipeline supply on April 29.
Trump told reporters on Friday that he had called OPEC and told the cartel to lower crude prices, without identifying who he spoke to.
Since taking office, Trump has weighed in on OPEC on numerous occasions on Twitter, often exhorting the cartel to lower prices. His comments tend to have a temporary effect on the market, and some traders noted that the recent move higher made the market ripe for profit-taking.
“I think the market should be more skeptical because I don’t think OPEC is going to jump every time Trump calls,” said Phil Flynn, analyst at Price Futures Group in Chicago. “Now, if we actually see evidence that OPEC is raising production, or says they’ll do it right away, that could change things.”
Traders also said the selloff was in part due to rumors that Washington could grant China an exemption allowing it to keep buying Iran’s oil, which would increase available worldwide supply. Washington said on Monday that it would end all exemptions for sanctions against Iran.
“The market had gotten all bulled up on Iran output, or exports going to zero or close to it,” said John Kilduff, a partner at Again Capital LLC in New York.
The United States and China are continuing to negotiate a trade deal to end a months-long dispute.
Meanwhile, U.S. crude production is at record highs and inventories are at their highest since October 2017, weighing on the oil market. This week’s U.S. rig count, an indicator of future output, is due at 1 p.m..