Crude Normalises, US Passes Further Sanctions On Iran

Oil prices finished Friday only moderately higher after rising strongly following news of Israel’s strike on Iran. Prices fell over $4/bbl after the peak as markets saw Israel’s response as a warning shot rather than an escalation in tensions. The USD index closed up only 0.1%.

• WTI finished 0.6% higher at $83.24/bbl after a high of $86.28 followed by a low of $81.80. It has started the week slightly higher at $83.26. It is up only 0.1% in April to date in line with technicals pointing to a short-term bearish corrective cycle. There is scope for it now to move down toward $80.64, 50-day EMA. The bull trigger is at $86.97.
• Brent rose 0.3% to $87.39/bbl after a low of $86.19 which followed a high of $90.75. It is up 0.5% this month. The break of the 20-day EMA signals the start of a corrective cycle and opens potential for a move towards $85.42, 50-day EMA. A break of this is needed to suggest a deeper retracement. The bull trigger is at $92.18.
• With Iran downplaying the attack on its central region of Isfahan, markets sold off but remain very jittery regarding any further escalation in the region.
• The US has reinstated sanctions against Venezuela and Mexico has reduced crude exports due to strong domestic demand. With OPEC+ maintaining its output cuts, supply remains a focus.
• Also, new sanctions against Iran were included in the foreign aid bill passed by the US House on the weekend. It will extend measures to include ships and refineries that process and transport Iranian crude. It will also cover all transactions to finance the purchase of oil products between China’s financial institutions and Iranian banks facing sanctions.