Crude Continues Recovery On Geopolitical Jitters

Oil prices continued their recovery on Tuesday as Houthi attacks in the Red Sea continue to divert shipping around the Cape of Good Hope and the US dollar softened (USD index -0.3%). They are off their highs after Qatar said that Hamas’ response to a ceasefire proposal was “positive”. US Secretary of State Blinken said that there was “still a lot of work to be done” but an agreement was possible.

• WTI rose 0.9% to $73.45/bbl following a high of $73.82. The benchmark fell to a low of $72.38 early in European trading. Last week’s move lower has undermined the recent bullish theme. Initial support is at $70.62 with key resistance at $79.29.
• Brent is 0.9% higher at $78.70/bbl after rising above $79 to make a high of $79.08. Earlier it fell to a low of $77.63. The benchmark has a short-term bearish tone. Initial support is at $76.13 and resistance at $81.55.
• Bloomberg reported that US crude inventories rose 674k barrels, less than expected, according to people familiar with the API data. While gasoline stocks rose 3.652mn, distillate saw a drawdown of 3.7mn. The official EIA data is out later today.