Oil prices gain after fall in US crude inventories

Crude prices have been supported by output cuts by OPEC and other major producers as well as falling supplies from Iran, but signs of China’s readiness to escalate a trade war with the United States have raised concerns about future demand.
 
U.S. crude inventories fell by 5.3 million barrels in the week to May 24 to 474.4 million barrels, data from industry group, the American Petroleum Institute, showed.
 
Due to the current turmoil in financial markets, it is a direct consequence of USA economic sanctions on Iran that put massive pressure on the supply side. The waivers on the embargo given to various countries, including India, has now been removed. Now it entirely depends on countries whether to continue to purchase oil from Iran or not.
 
Crude oil yesterday fell below $59 due to fear in the market about impending slowdown.  Economists all over the globe are predicting a slowdown in the growth that currently gripped the markets. Now to alleviate that fear, President Trump also needs to adopt a much conciliatory tone towards middle-east. 
 
The shortfall from the supply side will be detrimental to the global economy and will have far-reaching consequences. Continuous decline in the inventory in the USA and production cut from OPEC. 
 
Crude prices have been supported by output cuts by OPEC and other major producers as well as falling supplies from Iran, but signs of China’s readiness to escalate a trade war with the United States have raised concerns about future demand.
 
Crude prices remain supported by overall supply tightness.
 
Iranian May crude exports fell to less than half of April levels at around 400,000 barrels per day, tanker data showed, and two industry sources said after the United States tightened sanctions on Tehran’s primary source of income.
 
Many expect supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to be extended in a meeting next month.
 
Crude prices have risen by about 30 percent since the start of the year when OPEC+, which includes Russia, cut production to reduce a global glut.