Volatility Elevated as Trump Administration Considers Iran Sanctions

Brent Crude

U.S. West Texas Intermediate (WTI) crude CLc1 fell 39 cents to $67.80 a barrel.

But new reports of falling crude inventories in the USA and creeping concerns that President Donald Trump will slap sanctions on Iran propped prices back up.

President Trump will announce his decision about the Iran deal on May 12. Alternatively, if current support at the 72.44 level holds and the price reacts to the upside after the release of US Crude inventories data, it could open up the way for a retest of the initial upside resistance at 74.17, followed by 74.61 and the 75.00-75.50 levels.

Brent crude for June delivery rose 74 cents to end the session at $74.74 on the London-based ICE Futures Europe exchange.

Gasoline production averaged 9.9 million barrels daily last week, the EIA also said, and distillate production stood at 5 million bpd. But within the next couple of months, prices are likely to drop below $60 per barrel as markets digest the fallout of the USA steel tariffs and the implications of further retaliation from countries most affected by the ongoing trade war-which many think was unnecessary, especially in the wake of a global economic upturn in the last few years-leading to a bearish trend reversal in global crude-oil markets.

The Dow Jones Industrial Average lost 424 points, or 1.74 percent, while the S&P 500 lost 1.34 percent and the Nasdaq dropped 1.68 percent.

More news: Manhunt for gunman who killed ME deputy, stole cruiser and robbed store

"Geopolitical concerns in the Middle East, together with Venezuela's deteriorating macroeconomic situation, are supporting oil prices". It is widely anticipated that President Trump will pull the U.S. out of the Iran nuclear deal, which is bullish for prices, said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics.

That's nearly 10 million barrels above the five-year average. "The market that has been praying for an economy that was strong enough to raise rates now fears that somehow that a 3 percent yield is not a good thing - which really is insane and ridiculous".

Caterpillar, the biggest maker of construction and mining equipment, increased its 2018 profit projection by as much as 24 percent.

"All we're seeing is very strong pricing and the slight softening is primarily due to a stronger dollar", said Bjarne Schieldrop, SEB chief commodity analyst.

Over the past four weeks, motor gasoline product supplied averaged 9.4 million barrels per day, up 1.3 percent from the same period previous year.

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