Brent Breaks Key Resistance

Oil prices rose for a second consecutive day by around 1.5% as positive risk appetite supported commodities in general. Equities also rallied as softer-than-expected US retail data improved the rate cut outlook. The weaker US dollar also provided support with the USD index down 0.2%.

• WTI rose 1.5% to $81.57/bbl, after a high of $81.67. It has started today slightly lower at $81.49. The benchmark broke above resistance at $80.93 opening up $82.93. The bull trigger is at $86.16. Initial support is at $79.32, June 7 low.
• Brent broke above $85 and is up 1.3% to $85.35/bbl, the highest since late April. Its prompt spread is also its widest since April, signalling a tight market. The benchmark broke key resistance at $84.72 and if sustained undermines the recent bearish theme. The move has opened up $87.04. Initial support is at $81.95, 20-day EMA, and a break would be seen as an early reversal signal.
• Bloomberg reported that US crude inventories rose 2.26mn barrels last week, according to people familiar with the API data. But gasoline stocks fell 1.08mn while distillate rose 538k. Prices have looked through the data. The official EIA data is delayed one day due to today’s US holiday and will be released on Thursday.