Crude Continues To Trend Higher Driven By Supply Side

Oil prices have trended higher for most of today after rising sharply yesterday as worries about an escalation of tensions in the Middle East persist but also supported by risk appetite at times and the sixth straight weekly US crude inventory drawdown. The US dollar is also lower with BBDXY down 0.2%.

• Brent is up 0.1% to $78.39/bbl, but until recently was close to the intraday high of $78.70. WTI is 0.2% higher at $75.38 after a peak of $75.70, holding above resistance at $74.59.
• The US recorded a sixth straight weekly crude inventory drawdown last week. Stocks fell 3.73mn barrels to total 31.37mn over the period, implying robust US demand.
• The world continues to speculate on the timing of Iranian retaliation for Israel’s strike on Hamas’ political leader in Tehran. Reuters reported that all Egyptian airlines were warned to avoid Iranian airspace between 1130-1430 Tehran time yesterday and then 0430-0730 today. Iran had given the advice due to military exercises, but said that it will respond at a time of its choosing. Diplomatic efforts continue.
• Ukraine’s attack in the border region of Kursk, Russia taking gas infrastructure is also adding to energy-related global geopolitical risks.
• Later the Fed’s Barkin speaks and US jobless claims print.