Crude Stronger As Geopolitics Remain In The Fore

Oil prices rose around a percent after the US struck Iranian-backed militants and Israel turned down Hamas’ ceasefire demands. US stock data was mixed but the sharp drop in gasoline inventories seems to have provided some support to markets. The USD index was flat.

• Brent rose 1% to $79.36/bbl, close to the intraday high of $79.50 but is still down 1.5% in February to date. It traded in a narrow range of around a dollar on Wednesday. It remains in a bear-mode condition after last week’s reversal. Initial support is at $76.13, January 17 low, and resistance at $81.55, February 1 high.
• WTI is 1% higher at $74.06/bbl, just off the $74.22 high. It is still down 2.4% on the month. Clearance of $79.29, January 29 high, is needed to reinstate a bullish theme. Initial resistance is at $76.95 and support at $70.62.
• EIA reported crude stocks rose a much larger-than-expected 5.52mn barrels last week but gasoline fell 3.15mn signalling a pickup in crude demand in coming weeks.
• Bloomberg is reporting that there is currently flourishing oil-derivatives trading with total open interest across the main futures contracts at their highest in almost two years.