Crude Falls On Hopes Of A Gaza Truce

Oil prices fell around a percent on Monday as the geopolitical risk premium narrowed on hopes that a Gaza ceasefire agreement is getting closer. The 0.4% drop in the USD index was unable to prevent the slide.

• Brent fell 1.1% to $87.20/bbl after reaching a high of $88.22 during European trading. It fell to $86.95 but the breach of $87 was brief. Support remains intact at $85.88, 50-day EMA, and a clear break is required for a deeper retracement but for now recent moves signal the start of a corrective cycle. The bull trigger is at $91.18.
• WTI is down 1.3% to $82.73/bbl and has started APAC trading lower at $82.54. The benchmark is now up only 0.2% in April. It reached $83.91 before falling to $82.40 on Monday.
• Brent prompt spreads remain over a dollar in the bullish backwardation position signalling tight supply, according to Bloomberg. While on the bearish side, refining margins have shrunk substantially.
• Today’s Fed decision will be watched closely as oil markets are concerned that any further delay to easing could weigh on energy demand (see MNI Fed Preview).