Off Earlier Highs, But Positive Bias Intact On Mid-East Supply Concerns

Oil prices sit off earlier highs. Brent was last near $84/bbl, against an earlier high of $84.80/bbl. WTI was last tracking close to $78.40/bbl. Both benchmarks are around 0.50% higher, building on last week's +6% gains.

• The early spikes followed the late Friday Houti attack on a Russian linked carrier in The Red Sea. We have also had news of US soldiers under attack in Jordan on Sunday, near the border with Syria, reportedly by Iranian backed militia (with 3 fatalities).
• US President Biden has stated "We shall respond" at a campaign event in the US on Sunday. The Houthi attack from Friday raised concern that attacks on Red Sea shipping are expanding and not just confined to US, UK or Israeli linked ships.
• This is keeping Middle East supply concerns still front and center from a market concern standpoint.
• Elsewhere, Russia stated it has carried out its pledge to cut oversea oil supplies (see this BBG link for more details).
• For Brent, we tested late Nov highs close to $85/bbl earlier. This will remain the upside focus. On the downside the 200-day EMA sits back near $82.84/bbl.