Production cuts by Opec have led to worldwide oil prices hitting a four-year high last month that forced a Rs 3.8 per litre hike in petrol and Rs 3.38 a litre increase in diesel prices. A weekly market report from US motor club AAA said the national average retail price for a gallon of gasoline was at a point where consumers may be changing their habits.
Oil prices settled mixed on Tuesday as traders digested a newly-released monthly report from the Organization of the Petroleum Exporting Countries (OPEC). "You can not place sanctions on two OPEC founder members and still blame OPEC for oil price volatility", he said, referring to his country and Venezuela.
Saudi Arabia last month signaled it was ready to boost output in the second half of the year to ease consumer anxiety about higher prices, a policy U-turn for the kingdom that only weeks earlier advocated for production restraint.
Oil prices dropped on Wednesday as a result of increased supplies in the U.S.
The group is also contending with internal differences: Saudi Arabia favors easing output curbs implemented a year ago after they succeeded in shrinking a global glut, while Iran, Iraq and Venezuela oppose boosting production.
In any agreement, the amount of extra oil supplied to the market could end up being lower than the pledged boost.
Saudi production rose to 10.03 million barrels per day in May, in line with deal quotas, according to OPEC data.
Novak met with al-Falih in Moscow ahead of the Russia-vs-Saudi Arabia opening match of the World Cup and discussed a gradual exit from the cuts.
"If the other 12 OPEC members were to continue pumping at the same rate as May, a potential supply gap could emerge and lead to a draw on stocks of more than 1.6 million bpd in the fourth quarter of 2019", the report said.
USA crude inventories fell by 4.1 million barrels, to 432.4 million barrels.
However, it cautioned that there are possible downside risks to the demand outlook, including "the possibility of higher prices, a weakening of economic confidence, trade protectionism and a potential further strengthening of the USA dollar".
Opec itself spotlighted U.S. output in its own monthly report yesterday, citing the growth of non-Opec supply as one of several question marks hanging over the situation.
Oil's recent rally to a three-year peak above $80 a barrel in London has prompted warnings that prices could hurt economic growth. United States crude traded Wednesday near $67 a barrel.
"OPEC has the lowest spare capacity ever right now", said fund manager Pierre Andurand, in a tweeted response to Trump. Saudi Arabia, Iran's rival and the largest producer in OPEC, and Russian Federation, the world's largest producer and a party to the deal, have already increased supply.