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Oil Higher On Further Supply Worries

  • Crude oil prices are up 1.3-1.5% today on Russia-Ukraine fears whilst an intercepted Houthi rocket attack showed potential for further re-escalation elsewhere.
  • OPEC+ is set to increase production quotas by a scheduled 400kbpd tomorrow though many of its members are struggling to boost output, leaving production below target. OPEC+ is set to meet on Feb 2 to approve a March increase.
  • WTI is +1.5% at $88.14, closing on first resistance at $88.84 (Jan 28 high) after which it opens a psychological $90. Support is seen at $85.01 (Jan 26 low).
  • Reflecting supply concerns, price increases have been concentrated in front-dated contracts.
  • The most active strikes today in the H2 contract have been $90/bbl and $95/bbl calls.
  • Brent closed +1.3% at $91.2, also close to resistance at $91.7 (Jan 28 high).
  • Gold meanwhile has edged up 0.3% to $1797.3 after last week’s post-Fed slide, sitting comfortably between resistance of $1822.2 (Jan 27 high) and support of $1780.4 (Jan 28 low).

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