International Energy Agency lowers forecast for oil due to tightening supplies

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May 15, 2019 12:19pm NYSE:USO

From David Hodari: Global oil supply dropped in April as falling production from sanction-hit Iran and dwindling supply in non-OPEC nations buoyed crude prices to a five-month high, the International Energy Agency said Wednesday.

In its closely watched monthly oil-market report, the IEA said the world’s total oil supply fell by 300,000 barrels a day month-on-month to 99.3 million barrels a day. That’s roughly 3 million barrels a day below November 2018 highs, but an on-year rise of 775,000 barrels a day, the agency said.

The IEA pointed to mixed signals from the market during April, “with geopolitics and industry disruptions confusing the supply outlook.” It also cited persisting geopolitical worries in Libya, Iran, and Venezuela, as well as the contamination of Russian crude passing through the Druzhba pipeline.

Brent crude LCON9, +1.08% the global oil benchmark, was down 0.3% early Wednesday at $71.00 a barrel on London’s Intercontinental Exchange.

The United States Oil Fund LP (USO) was trading at $12.95 per share on Wednesday morning, up $0.08 (+0.62%). Year-to-date, USO has gained 7.83%, versus a 7.18% rise in the benchmark S&P 500 index during the same period.

USO currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 110 ETFs in the Commodity ETFs category.

This article is brought to you courtesy of MarketWatch .

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