Crude Falls On “High For Longer” Rate Fears

Oil prices trended lower through Tuesday’s European/NY sessions as concerns that rates would remain high for longer outweighed China’s rate cut and continued tensions in the Middle East. It bounced before weaker equity sentiment pressured markets. The USD index softened 0.1%. OPEC’s decision on whether to extend production cuts into Q2 remains the next key event for oil markets.

• WTI fell 1.6% to $77.21/bbl after reaching an intraday low of $76.80, which reinforces that recent gains have been corrective. Initial support is at $75.07, 50-day EMA. Key resistance is at $79.75 and a clear break of this level is needed for a bullish shift.
• Brent made a clear break below $83 once soft equity sentiment began driving markets and is now down 1.2% to $82.53/bbl after an intraday low of $82.05. Initial support is at $79.88, 50-day EMA. Clearance of resistance at $84.17 would cancel the recent bearish threat and open $86.03.
• OPEC is due to announce its decision on output cuts in early March. Russia said it met its commitment in January with exports around 307kbd lower than the May/June average. Iraq has said it will improve its compliance after data showed it was still producing above its quota.