Crude oil prices are sliding on Wednesday after the American Petroleum Institute (API) reported that crude oil stockpiles in the US rose by 8.6 million barrels in the week to May 10th, surprising markets which expected crude supplies to drop anywhere between 800,000 to 3.0 million barrels. With markets already pricing in lower crude demand on the back of an escalation in the US-China trade war, the data was enough to send oil prices on a tailspin with WTI crude for June delivery (CLM9) sliding more than 90 cents and the benchmark Brent crude for July (LCON9) shipment falling close to 75 cents before pulling back somewhat.
Crude prices are likely to find support in the near-term following mounting tensions in the Middle East after Saudi Arabia claimed that two of its oil pumping stations were targeted by drones from Yemen on Tuesday, putting the spotlight back on the Strait of Hormuz which Iran has reportedly threatened to close down in retaliation against US sanctions. Until the simmering tensions die down, Brent could find support at around $70 a barrel while WTI crude is likely to trade north of $60 a barrel.
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