US crude oil last week
Last week, US crude oil June futures fell 6.8% and closed at $58.63 per barrel on May 24—the largest weekly decline since December 21. The S&P 500 Index (SPY) fell 1.2% last week. The fall in the broader market might have made oil fall sharper despite heightened geopolitical tensions in the Middle East.
Will US crude oil cling to $60 this week?
At 5:48 AM EST on May 28, US crude oil prices rose ~0.9% from the closing level last week. Earlier on May 28, US crude oil prices made an intra-day high of $59.35 per barrel. US crude oil futures should close between $55.89 and $59.93 per barrel until the end of this month. Rising US crude oil supplies and the IEA trimming the oil demand growth forecast are the two important factors that dragged oil prices last week apart from trade war sentiments.
However, before the US ended waivers for countries importing oil from Iran, most of the Iranian oil buyers ended their oil imports—based on a Wall Street Journal report. According to Reuters, the difference between the Middle East regional grades of oil and other international grades of oil hit a multiyear high in May. The high might be because Iranian oil buyers switched to other oil suppliers in the Middle East, which might indicate a tighter oil market.
US crude oil is expected to reclaim the psychologically important level of $60. However, rising global growth concerns might limit any upside in US crude oil prices above the $60 level.