2019.05.2015:32:00UTC+00Crude Oil Futures Settle Modestly Higher

Crude oil prices edged higher on Monday as prospects of a likely fall in supply amid an escalation in tensions in the Middle East and on OPEC's indication that it is likely to maintain production cuts for some more time.

Meanwhile, the likelihood of a drop in energy demand due to the ongoing trade war between the U.S. and China limited crude oil's gains.

West Texas Intermediate Crude oil futures for June ended up $0.34, or 0.54%, at $63.10 a barrel.

Brent crude oil futures for June was down $0.24 at $71.97 a barrel around mid afternoon, after having touched a high of $73.40, a near four-week high, earlier in the day.

According to reports, Saudi Energy Minister Khalid al-Falih said on Sunday that OPEC and allied oil producers are in favor of driving down crude inventories "gently".

United Arab Emirates Energy Minister Suhail al-Mazrouei reportedly said early on Sunday that producers were capable of filling any market gap and that relaxing supply cuts was not the right decision.

According to OPEC data, oil inventories in the developed world were up by 3.3 million barrels month-on-month in March. That was nearly 23 million barrels above the five year average.

At the meeting of the Joint Ministerial Monitoring Committee in Jeddah over the weekend, the members did not make any solid recommendations and decided to review production cuts during their meeting in Vienna next month.

Tensions in the Middle East have escalated after reports poured in on Sunday about a rocket launch into Baghdad's heavily fortified Green Zone less than a mile away from the U.S. embassy.

"If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!," Trump tweeted subsequently.

Meanwhile, a Saudi Arabian diplomat said his country doesn't want to go to war with Iran but would defend itself after two Saudi oil tankers were targeted by acts of sabotage off the coast of the United Arab Emirates last week.

Mounting worries about U.S.-China trade war following last week's decision of the U.S. government to blacklist Chinese technology giant Huawei and ban the company from buying components and technology from US firms without prior approval of the US government have raised concerns about energy demand.