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Firms As Middle East Conflict Concerns Outweigh Higher USD/US Inventory Build

OIL

Brent crude sits just off session highs in recent dealings, last near $90.75/bbl. This is close to 0.30% stronger versus end Wednesday levels in NY (Wednesday gains were +1.19%). WTI is above $86.45/bbl, having followed a similar trajectory so far in Thursday trade.

  • Sentiment remains on edge amid fears of a strike on Israel from Iran or a proxy. In US trade on Wednesday, per Bloomberg, the US and its allies believe that "major missile or drone strikes by Iran or its proxies against military and government targets in Israel are imminent," in retaliation for an Israeli airstrike on an Iranian diplomatic compound in Damascus on April 1.
  • Earlier headlines also crossed that Iran was closing down its airspace due to military drills, also this was later removed and denied by local new agencies.
  • Risks of an escalation in the Middle East conflict outweighed a higher yield backdrop, firmer USD (post the stronger than expected CPI) and also rising US crude stockpiles, which was reported on Wednesday.
  • A bull theme in WTI futures remains intact and the next objective is $89.08, a Fibonacci projection. If cleared, this would pave the way for a climb towards the $90.00 handle further out. On the downside, initial firm support to watch lies at $83.03, the 20-day EMA.
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Brent crude sits just off session highs in recent dealings, last near $90.75/bbl. This is close to 0.30% stronger versus end Wednesday levels in NY (Wednesday gains were +1.19%). WTI is above $86.45/bbl, having followed a similar trajectory so far in Thursday trade.

  • Sentiment remains on edge amid fears of a strike on Israel from Iran or a proxy. In US trade on Wednesday, per Bloomberg, the US and its allies believe that "major missile or drone strikes by Iran or its proxies against military and government targets in Israel are imminent," in retaliation for an Israeli airstrike on an Iranian diplomatic compound in Damascus on April 1.
  • Earlier headlines also crossed that Iran was closing down its airspace due to military drills, also this was later removed and denied by local new agencies.
  • Risks of an escalation in the Middle East conflict outweighed a higher yield backdrop, firmer USD (post the stronger than expected CPI) and also rising US crude stockpiles, which was reported on Wednesday.
  • A bull theme in WTI futures remains intact and the next objective is $89.08, a Fibonacci projection. If cleared, this would pave the way for a climb towards the $90.00 handle further out. On the downside, initial firm support to watch lies at $83.03, the 20-day EMA.