November 20, 2023 20:13 GMT
Geopolitical Risks To Shipping Help Spur Oil Rally
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- Crude markets have lost some of their earlier gains but still see conitnued strong increases on the day to more than unwind last Thursday’s demand-led slide. Middle East tensions are still an upside risk to prices with shipping in focus after Iran-backed Houthi Rebels seized a Japanese chartered vessel in the Red Sea on Sunday according to Bloomberg. Iran denied its role in the seizure of the ship.
- Most sell-side analysts forecast Saudi Arabia will extend its output cut into 2024, while some assume OPEC may deepen cuts due to the recent bearish trend in prices. Additional upside is provided from the renewed risk due to Middle East tensions.
- Venezuela will not accept "ultimatums from anyone" according to Venezuela's National Assembly President Jorge Rodriguez after the US warned it will assess eased sanctions relief if fair election progress is not made.
- WTI is +2.25% at $77.60 off a high of $78.20 that pushed closer to resistance at $78.91 (20-day EMA).
- Brent is +2.0% at $82.24 off a high of $82.94 to move closer but not trouble a key short-term resistance at $83.97 (Nov 14 high).
- Gold is -0.1% at $1978.38, retracing some of its earlier declines with the conitnued decline in the USD index. After last week’s strong gains, there is still some way until support at $1943.1 (50-day EMA) whilst resistance is seen at $20094. (Nov 7 high).