April 16, 2024 04:28 GMT
Crude Climbs Higher On Tense Middle East
OIL
Crude has started today stronger rising around 0.5%, in response to Israel’s decision to retaliate to Iran’s attack and the latter’s threat to respond “within seconds”. Markets remain wary with a third of oil output coming from the region. Prices are off their highs made earlier in the day as China’s March data was mixed. Brent is up 0.5% to $90.58/bbl but rose to a high of $90.84 earlier. WTI is 0.6% higher at $85.91 after rising to $86.18. The USD index is 0.2% higher.
- Israel’s war cabinet said that an attack of that magnitude can’t go unanswered with defence minister Gallant expressing that “Israel won’t accept an equation in which Iran responds with a direct attack every time Israel strikes targets in Syria”.
- China’s March oil refining rose 1.3% y/y to a 5-month high as product stocks were rebuilt following the Lunar NY holiday. Processing should decline over April/May though for seasonal maintenance but low margins may exacerbate this.
- Geopolitics are currently driving oil prices but supply/demand fundamentals are always nearby. Demand in the US is expected to pick up to increase gasoline supplies for the driving season. Later today US inventory data from the API are released.
- Later the Fed’s Powell (1815 BST), Jefferson, Williams, Barkin and Collins appear, as well as BoE’s Bailey and BoC’s Macklem. There are also US March housing starts/permits, IP & April NY Fed services, UK labour market and Canadian March CPI data. The IMF is due to publish the April World Economic Outlook.
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