Crude Consolidates But Watching Geopolitics & Supply Developments

Oil prices fell late in Tuesday trading and are now close to their intraday lows following reports that US crude stocks rose strongly last week. They were trending lower before the data on a stronger US dollar (US index +0.1%) and as the market took stock following recent strong rises driven by persistent geopolitical problems, Fed easing expectations and continued OPEC cuts.

• WTI fell 0.8% to $81.29/bbl but is still 5% higher in March. It rose to a high of $82.36 before beginning to trend down. Initial support is at $79.64, 20-day EMA, and resistance at $83.12, March 19 high.
• Brent is down 0.9% to $85.95/bbl after a high of $87.06 earlier. The benchmark is up 4.9% this month. A bull cycle remains the current theme and Tuesday’s move lower is seen as corrective. Brent traded between support at $84.36 and resistance at $87.70 yesterday.
• Bloomberg reported that there was a significant crude stock build of 9.34mn barrels last week, according to people familiar with the API data. However, gasoline inventories fell 4.44mn, while distillate rose 500k. The official EIA data is out later today.
• Crude didn’t react to continued geopolitical tensions with Iran-backed Houthis saying they had targeted six US and UK vessels over the last 3 days off the coast of Yemen. The group has also threatened Saudi Arabia if it supports attacks against them. Gaza ceasefire talks have been derailed by what Israeli PM Netanyahu said were Hamas’ “delusional demands”.