No SPR decision yet; Opec should act: Trump

US president Donald Trump said today the US was still weighing whether to release oil from emergency stocks and suggested that other Opec members should ramp up production to offset lost Saudi output.

The oil prices "have not risen very much," Trump said today. "It went up $5/bl and it is not a problem," he said. "If you look at what is happening with respect to the stock market, it is holding firm, considering what has happened in Saudi Arabia."

Nymex October light sweet crude futures rose by $8.05/bl to $62.90/bl today, its highest since mid-May. Ice November Brent increased by $8.80/bl to $69.02/bl.

Saudi Arabia has been forced to shut-in 5.7mn b/d of crude output after attacks on 14 September caused fires at the Abqaiq crude processing plant and at the 1.45mn b/d Khurais field.

Trump, who met Bahrain's crown prince Salman bin Hamad at the White House today, said releasing oil from the US Strategic Petroleum Reserve was still a possibility but suggested that Opec producers should take collective action to boost production.

"We have strategic reserves, which are massive, and we can release a little bit of that," Trump said. "And other countries, including Bahrain, can be a little more generous with the oil and bring it right down."

The US is holding consultations with the Paris-based IEA and other countries to determine the need and the amount of the release. "President Trump has authorized the release of oil from the SPR if that is needed," US energy secretary Rick Perry said today. "My department stands ready to respond."

Russian energy minister Alexander Novak and a Mideast Gulf Opec delegate said today it was too early to determine whether the Opec/non-Opec alliance will change its production cut agreement. But Opec and its non-Opec partners may need to rethink their production management policy, at least in the short term, depending on the duration and scale of the Saudi disruption.

The drastic drop in Saudi production has become a talking point for Trump to highlight the growth of US oil production, for which he takes credit.

"You have to remember, we are the largest producer in the world," Trump said. US producers stand to gain from the price hike, he said. "I never want to benefit that way. But there are those who say we benefit from that and we are certainly taking in more money than anyone else."

US oil production is at record levels, averaging over 12mn b/d, even though it has been leveling off in recent months in reaction to lower prices. But the shortage of supplies brought on by the weekend attacks could change that.

The rise in domestic oil and gas production have made it difficult to clearly assess the effects of oil price changes on the US economy. But Trump and other US politicians remain sensitive to the increase in domestic gasoline prices. Trump today praised Riyadh for accommodating his requests in the past to raise production to offset high oil prices.

Riyadh ahead of the November 2018 imposition of US sanctions on Iran relaxed the then Opec+ production cut constraints, lifting output in anticipation of a full ban on Iranian crude exports. But the US at that time allowed some Iranian exports to continue, leading to a large decline in oil prices. Saudi and Opec officials subsequently complained of being surprised by the US move and ignored Trump's calls to significantly raise output even though the US in May instituted a full sanctions ban on Iranian exports.

Trump yesterday said he would order his administration to "expedite approvals of the oil pipelines currently in the permitting process in Texas and various other states." But the administration has already prioritized expediting federal approval of oil pipelines, making it uncertain if his instructions would have any effect. Midstream companies have been rapidly adding pipeline capacity to the US Gulf coast, especially in the Permian basin, including pipeline expansions and new builds.