Crude Steady As Weaker Risk Appetite Offsets Continued Red Sea Tensions

Oil prices fell slightly on Monday after rising over a percent on Friday, as the US Martin Luther King holiday impacted volumes. Prices fell during the European morning due to the stronger greenback (USD index up 0.2%), weaker risk appetite and little impact on supply from longer shipping routes but then rebounded following a Houthi missile strike on a US-owned vessel.

• WTI is down 0.25% to $72.50/bbl off the intraday low of $71.23 but it had reached a high of $72.93 earlier on Monday. The benchmark is up 1.2% since the start of the year but the trend signals remain bearish. Initial support is at $69.28 and the bear trigger at $67.98 with the bull trigger at $76.18.
• Brent is 0.2% higher at $78.45/bbl after falling to $76.85 but is still up 1.9% this month. It made a high of $78.65 earlier. Key short-term resistance is at $81.45 and the bear trigger at $72.67.
• The US department of transportation has warned US merchant vessels to avoid the Red Sea after a US merchant ship was hit by a Houthi missile but without sustaining damage. An Oil Brokerage note reported that about 4% of active tankers are caught up in the Red Sea conflict.
• Production has been disrupted in parts of North America due to very cold weather.