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Lower, Despite Potential Supply Headwinds

OIL

Oil was supported in early trade but found selling interest quite quickly. WTI is back near $73.65/bbl in recent dealings, close to session lows. This puts us 0.50% weaker versus Friday closing levels. Brent is off by a similar amount, last near $78.40/bbl. Both benchmarks aren't too far away from mid Nov lows, as bearish sentiment persists in the space.

  • A rebound in US yields today has helped USD sentiment, which has likely helped crimp oil demand at the margins.
  • Weekend news of attacks by Houthi rebels on three commercial shipping vessels in the Red Sea on Sunday may have aided sentiment in early trade, but there was no positive follow through in terms of spot prices.
  • Likewise, and also on the supply side, there seems to be doubts over whether the US will lift sanctions on Venezuela after the President failed to release American prisoners by the November 30 deadline. This hasn't impacted sentiment positively though.
  • Brent crudes prompt spread remains close to recent lows.
  • For WTI, the bear trigger is $72.37, while for Brent it's at $76.71.

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