There is no doubt that the orchestrated output curbs led by major producers have contributed to those higher prices. Saudi Arabia is the world’s largest oil exporter, Russia is a major non-OPEC oil power, and the agreement has helped to ensure that a global oil glut that was depressing prices has reduced substantially.
“Prices are high,” said Rob West, an analyst at Redburn, a London research firm. Noting that Mr. Trump may have a point, he added, “I do see some artificiality in the prices we see today.”
Geopolitical concerns are also coming into play. The oil industry of Venezuela, once a major OPEC producer, is near collapse, pulling down production there. There are also worries that Mr. Trump’s own threats to tear up the Iran nuclear deal will have an impact on Iranian supplies, which had increased. And worsening tensions between Saudi Arabia and Iran have added to traders’ concerns.
Global demand for oil has also been surprisingly strong in both industrialized countries and emerging markets outweighing developments like increasing numbers of electric vehicles.
But there are mitigating factors. Higher oil prices have spurred some suppliers to increase their production. In particular, shale oil producers in the United States have raised their output in recent months. These operators sharply cut production after prices crashed in 2014, but they have cut costs in the years since and streamlined their operations.
Mr. Trump’s comments may have been prompted by the meeting in Jidda on Friday. Oil officials from OPEC, Russia and other producers were there to discuss the production cuts, including the level of adherence to the deal. It is not yet clear whether the agreement will be extended beyond its scheduled expiration at the end of the year, but press reports suggest the Saudis favor prolonging the cuts.
In a statement on Friday, OPEC praised the “high conformity” level with the cuts but implied that continued curbs were needed, saying that “commercial stocks remain above levels seen before the market downturn.”