Crude Rises On Expectations OPEC Extends Cuts, Headed For Monthly Gain

Oil prices were stronger again on Tuesday driven by continued attacks on Red Sea shipping and growing expectations that OPEC cuts will not only be extended into Q2 but remain in place to the end of the year. Futures contracts are pointing to a tightening market.

• WTI rose 1.2% to $78.52/bbl. The intraday high hit $79 but found resistance there. Key resistance is nearby at $79.09 and clearance of this level would be a bullish development. The benchmark is now 3.7% higher in February.
• Brent is up 0.9% to $83.28 down from the high of $83.70, approaching key short-term resistance at $84.17. A clear break of this is needed to highlight a stronger reversal. Key support is at $76.62. It is now 3.4% higher on the month.
• Bloomberg reported a crude inventory build of 8.428mn barrels, according to people familiar with the API data. But product stocks continued to rundown with gasoline -3.3mn and distillate -500k. Refinery outages for maintenance have resulted in crude builds and product drawdowns. Official EIA data is out later and includes refinery capacity utilisation.
• The UK Navy reported a rocket exploded 3-5NM from a vessel but it is safe and will continue to its next port. The US destroyed 3 unmanned surface vessels on Monday. Global shipping giant Maersk is warning that attacks on shipping in the Red Sea could continue into H2 2024 causing heavy congestion and delays to shipments to the US.