Consolidates After Monday's Dip

Oil benchmarks couldn't carry early positive momentum and sit off session highs in recent dealings. The Brent front end benchmark was last around $90.65/bbl around 0.20% stronger versus end Monday levels in NY. Earlier highs were at $90.90/bbl. For WTI, the benchmark was last close to $86.65/bbl. The general trend is one of consolidation after Monday's dip, but we remain fairly close to recent highs.

• Near term developments remain focused on Middle East geopolitical risks. There are conflicting views around the progress of Israel/Hamas peace talks from both sides. The other focus point remains Iran's potential response to a suspected Israel attack on its consulate in Syria last week.
• The broader backdrop is still expected to be supportive. Citadel notes the second half supply backdrop should be tight (see this BBG link). Signs of a softer landing, particularly in the US, is also likely to be helping at the margin.
• Levels wise, for WTI, the next objective is $89.08, a Fibonacci projection, a break of which would pave the way for a climb towards the $90.00 handle. On the downside, initial firm support to watch lies at $82.42, the 20-day EMA.