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US Crude Holds Steady As Geopolitical Tensions Dominate Trade

Summary:
Crude oil futures are holding steady midweek, despite an unexpected increase in US inventories. Oil prices are finding direction on geopolitical developments, particularly in the Middle East where tensions are building amid US-Iran strife. Crude gains have been capped by the US-China trade war and a stronger dollar. June West Texas Intermediate (WTI) crude oil futures tacked on %excerpt%.29, or 0.47%, to .07 per barrel at 18:25 GMT on Wednesday on the New York Mercantile Exchange. WTI prices are trading relatively flat on the week, but they are up an astounding 30% year-to-date. Brent, the international benchmark for oil prices, is also advancing in the middle of the trading week. July Brent crude futures rose %excerpt%.61, or 0.86%, to .85 a barrel on London’s ICE Futures exchange. Brent has

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Crude oil futures are holding steady midweek, despite an unexpected increase in US inventories. Oil prices are finding direction on geopolitical developments, particularly in the Middle East where tensions are building amid US-Iran strife. Crude gains have been capped by the US-China trade war and a stronger dollar.

June West Texas Intermediate (WTI) crude oil futures tacked on $0.29, or 0.47%, to $62.07 per barrel at 18:25 GMT on Wednesday on the New York Mercantile Exchange. WTI prices are trading relatively flat on the week, but they are up an astounding 30% year-to-date.

Brent, the international benchmark for oil prices, is also advancing in the middle of the trading week. July Brent crude futures rose $0.61, or 0.86%, to $71.85 a barrel on London’s ICE Futures exchange. Brent has risen more than 2% this week and it has soared 31% on the year.

According to the US Energy Information Administration (EIA), US crude supplies climbed by 5.4 million barrels for the week ending May 10. The market had penciled in a decline of 1.4 million barrels. Gasoline stockpiles fell 1.1 million barrels, while distillate inventories rose 100,000 barrels.

This data comes the same day as the International Energy Agency (IEA) reduced its forecast for oil demand growth for the rest of the year by 90,000 barrels per day (bpd) to 1.3 million barrels.

The US Baker Hughes total oil rig count came in at 805, down from 807 in the previous week.

For now, geopolitical developments are supporting crude futures.

Tensions between Washington and Tehran have increased in recent weeks. Not only is the US imposing sanctions on Iran, which will cripple the nation’s oil production capabilities, the US is ordering all non-emergency staff to leave Iraq immediately. With the recent attacks against oil tankers and facilities in the Persian Gulf region, the White House has adopted a stronger stance toward the major oil exporter. Although the reports were disputed by President Donald Trump, it was reported that the US is considering putting 120,000 boots on the ground in Iran if his administration finds it necessary.

A stronger buck is putting a cap on oil’s gains. The US dollar edged up 0.05% to 97.56 as the greenback has jumped 1.5% YTD. A strengthening currency is bad for dollar-denominated commodities because it makes more expensive for foreign investors to purchase.

In other energy markets, June natural gas futures plunged $0.06, or 2.29%, to $2.60 per million British thermal units (btu). June gasoline futures added $0.04, or 2.01%, to $2.01 a gallon. June heating oil futures increased $0.03, or 1.45%, to $2.09 per gallon.

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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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