Market In Holding Pattern While Watching Middle East

Oil prices ended Tuesday close to flat with heightened tensions in the Middle East offset by a stronger greenback (USD index +0.4%) as Fed cuts appear delayed, a large US inventory build and increased Russian crude output. The market is monitoring developments closely with Israel stating it has to respond to Iran’s attack. Prices have risen around 18% this year and second-round effects on other costs will be watched closely.

• WTI fell 0.1% to $85.31/bbl and has started the APAC session slightly higher at $85.35. It fell to a low of $84.75 during the European session before recovering somewhat and range trading. The benchmark is now up 2.6% in April. WTI remains in an uptrend with resistance at $87.67 and support at $83.86.
• Brent was steady and finished at $90.09/bbl to be up 3.6% this month. It fell below $90 during European trading and made a low of $89.41. It has started today at $90.02. The benchmark is consolidating but the bull cycle remains in place and moves lower are considered corrective. Initial resistance is at $92.18, April 12 high, and support at $88.10, 20-day EMA.
• Bloomberg reported that US crude stocks rose 4.09mn barrels last week, according to people familiar with the API data. But with refined products seeing inventory drawdowns, gasoline -2.5mn and distillate -427k, this may be a stock build to refine for the driving season. The official EIA data is out later today.