Crude Little Changed As Resolution Hopes Offset Increased Middle East Tensions

Oil prices are little changed with the benchmarks moving in opposite directions. Brent is down 0.3% to $81.94/bbl while WTI is up 0.1% to $76.92. Rising tensions in the Middle East were offset by efforts to find a solution thus leaving oil prices little changed. Markets have also been quiet with much of Asia closed for holidays and the US CPI released later today. The USD index was flat.

• Resistance for WTI is at $78.14 while Brent’s is at $82.86, both January 30 highs.
• Excess supply remains a concern with Saudi Aramco saying that it would still expand capacity and US output rising to 9.716mbd for March, according to EIA Drilling Productivity Report. But Iraq has cut output and Morgan Stanley increased its Q1 Brent forecast by $2.50 to $82.50/bbl due to better-than-expected OPEC quota compliance.
• While Israel attacks southern Gaza, Iran has said that a “diplomatic solution” was possible. Iran discussed releasing Israeli hostages with the Palestinians over the weekend.
• There was another Houthi attack on a vessel in the Red Sea.
• OPEC’s Monthly Oil Report is published later today.