Here's Why Oil Prices Dipped to almost $50 Today

Iran’s election is soon but still there is no clarity

"A build to gasoline inventories is tilted a little bearish, although a build of 2.5 million barrels on the Gulf Coast was in response to higher refining activity", said Matt Smith, director of commodity research at ClipperData.

If the losses hold, it would extend crude's decline to three straight days.

US crude stocks fell last week as refineries hiked output, but gasoline supplies, which are already seasonally high, surprisingly increased, the Energy Information Administration said on Wednesday.

The petrostates behind this cut are stuck behind a rock and a hard place-the hard place being the fiscal squeeze bargain oil is placing on their governments, and the rock being US shale production.

"Total inventories of crude and products moved to a deficit versus year-ago levels for the first time since August 2014, despite a build in gasoline stocks following refinery runs rising by 241,000 [barrels per day]", said Troy Vincent, oil analyst at ClipperData.

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OPEC and a group of 11 other oil producing countries agreed late last year to cut their collective production by 1.2 million barrels per day through the first six months of this year, hoping that their market intervention might eat away at the global glut of crude and push prices upwards. USA crude inventories were at 532.3 million barrels, only about 3 million barrels less than the record reached in March.

Brent for June settlement fell $1.96, or 3.6 percent, to $52.93 a barrel on the London-based ICE Futures Europe exchange.

Oil markets are on path to recovery due to measures taken by Opec and non-Opec members to cut production by 1.8 million barrels per day from January this year, secretary general of Opec said at the third GCC petroleum media forum that kicked off in Abu Dhabi on Wednesday. During that period, crude oil prices (USO) (USL) (UCO) (BNO) were falling.

In parallel, imports declined by 68,000 barrels a day last week to 7.8m barrels, while domestic oil output rose slightly. Oil prices jumped by more than 10 per cent following the deal with worldwide benchmark Brent crude now trading above $55 per barrel. This week, U.S. President Donald Trump ordered a review of whether the lifting of sanctions against Iran was in the United States' national interests.

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