Crude oil prices to trade sideways today: Angel Commodities

US President Donald Trump renews sanctions against Iran Opec’s third-largest producer

Many informed sources speculate that Trump's tweet in April which blamed OPEC for high oil prices might be playing a part in the negotiation process that is underway to reach an understanding with Saudi Arabia. The XLE dropped 4% in 2017, severely underperforming the S&P 500 index, which gained 19% a year ago.

"Looking into the next 18 months, we expect global oil supply to demand balances to tighten driven by the ongoing collapse in Venezuelan output".

This week, Israel and Iran engaged in an extensive military exchange on the heels of Mr. Trump's decision to leave the deal.

"Iran's exports of oil to Asia and Europe will nearly certainly decline later this year and into 2019 as some nations seek alternatives in order to avoid trouble with Washington and as sanctions start to bite", said Sukrit Vijayakar, director of energy consultancy Trifecta. The rally is being driven by looming USA sanctions against major oil producer and OPEC-member Iran which threaten to drive prices even higher over the near-term as traders prepare for an even tighter supply situation.

Meanwhile, the annual inflation rate in the US edged up to 2.5 percent in April from 2.4 in March, matching market expectations.

The 180-day time frame could be indicative of a knee-jerk reaction in Wednesday oil price movements as Iranian oil wasn't impacted overnight. Unlike last time, when a broad worldwide coalition supported the sanctions (wary that the Iranian nuclear program could reach a tipping point), many nations now oppose the reimposition of sanctions.

Bolton said on CNN's "State of the Union" that he believes some European countries will end up supporting the United States despite comments from European leaders that they regret Trump's decision to withdraw. Japan and South Korea might comply with the reimposition to keep good ties with the US, but might also seek exemptions to minimize damage. If you are too aggressive and Iran starts dumping oil on the market, you could be in for a world of hurt.

In other news, USA crude inventories fell by 2.2 million barrels in the week to May 4, to 433.76 million barrels, according to the Energy Information Administration (EIA), slightly above the 420 million barrels five-year average level.

BoA analysts forecast a strong average price for the year ahead.

Trump's move has also divided the worldwide community and that will, at best, prolong the uncertainty in global oil supplies.

This, combined with collapsing oil production in Venezuela - previously a major oil producer - has significantly shrunk global oil levels.

President Donald Trump's decision to reinstate sanctions on Iran has sent oil prices higher on speculation that the move will remove some crude from the market.

$100 oil could provide a further boost for energy stocks.

"Europe and China will not fight against the US sanctions".

Extra supplies from the Organization of Petroleum Exporting Countries, meanwhile, are short because of an agreement to limit production to erase a previous surplus. After all, it's a global commodity in a global market.