Crude Prices Hold Steady As Markets Pause

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Includes: BNO, DBO, DNO, DTO, DWT, OIL, OILK, OILX, OLEM, OLO, SCO, SZO, UCO, USL, USO, UWT, WTID, WTIU
by: Investing.com

U.S. oil prices held steady on Friday, as markets were still digesting Thursday's Paris terrorist attack and were gearing up for the first round of France's presidential election on Sunday amid ongoing uncertainties over global oil supply levels.

U.S. crude futures for June delivery held steady at $50.70 a barrel, just off Wednesday's two-week trough of $50.09.

On the ICE Futures Exchange in London, the June Brent contract was little changed at $53.01 a barrel, not far from Wednesday's nearly three-week low of $52.58.

Markets were jittery after a French policeman was shot dead and two others were wounded in central Paris on Thursday night in an attack claimed by the Islamic State.

Market participants were also eyeing the first round of the French presidential election due on Sunday, as recent polls have forecast the most likely outcome to be centrist Emmanuel Macron against far-right candidate Marine Le Pen.

Meanwhile, the greenback mildly recovered from recent losses after U.S. Treasury Secretary Steven Mnuchin said on Thursday that the administration will unveil a tax reform plan very soon.

The comments eased doubts over whether President Donald Trump will be able to pass tax reforms in the near term.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was steady at 99.76 on Friday, off the previous session's three-week lows of 99.29.

Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.

But sentiment on the greenback remained under pressure after North Korean state media warned the U.S. earlier in the week of a "super-mighty preemptive strike" and said don't "mess with us."

On the other hand, crude oil prices were also under pressure amid concerns an ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.

In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day between January and June. A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.

The U.S. Energy Information Administration said this week that crude oil inventories fell by 1.0 million barrels in the week ended April 14, a smaller draw than expected.

The report also showed that gasoline inventories increased by 1.5 million barrels, disappointing expectations for a drop of 1.9 million barrels, despite heavier refining activity.

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