Crude Rises To Highest Since October On Supply Concerns

Oil prices continued to climb higher during Tuesday’s US session ahead of today’s Fed decision. Supply concerns drove prices up with Ukrainian strikes on Russian refineries adding a risk premium and Iraq saying it will reduce its exports. The USD was stronger again with the index up 0.2%.

• WTI is off its intraday highs rising 0.4% to $82.50/bbl. It broke above $83 briefly a number of times to reach a peak of $83.12, highest since late October, but it couldn’t sustain the break. The benchmark is now up 6.6% this month and 14.4% this year. Key resistance is at $84.87, September 15 high. Initial support is at $78.44, 20-day EMA.
• Brent rose to a peak of $87.70/bbl on Tuesday but is now around $87.23 to be up 0.4% on the day. It is now 6.5% higher in March and 13.6% this year. Key resistance is at $89.26 while initial support is $83.14.
• Ukrainian strikes have affected around 12% of Russia’s refining capacity, according to ANZ.
• Bloomberg reported a 1.52mn barrel crude inventory drawdown last week, a lot more than expected, according to people familiar with the API data. While distillate stocks rose 500k, gasoline fell a further 1.6mn pointing to robust demand. The official EIA data is out later today.