Crude Recovers On Better US Data & Geopolitics

Oil fell 2.5% driven by the sharp deterioration in risk appetite but then found support from the solid US July ISM/PMI data, which reduced recession fears, to finish up on the day. An attack on a US base in Iraq has driven crude higher at the start of APAC trading. Also today has started with a better risk tone as US equity futures rally. The USD index fell 0.3%.

• WTI rose 0.5% to $73.92/bbl and is now around $74.22. It fell to a low of $71.67 before the US data and then recovered from there. Initial support is at $71.67, while resistance is at $74.59.
• Brent is up 0.6% to $77.25/bbl after falling to a low of $75.05. A bear cycle remains intact with the benchmark falling below key support at $76.42, but is again above this level, which is seen as corrective. Initial resistance is at $77.95.
• While the market worries about the demand outlook, troubles in the Middle East are a threat to supply with an attack from Iran expected. In addition, Libya’s largest field has completely stopped production, which the government has called “political blackmail”. Libya produces 1.27mbd and is the 30^th largest producer in the world.