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OIL: Overnight Sell Off Pauses as Biden tells Israel Not to Attack Iran Nuclear.

OIL
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  • Ongoing Middle East tensions on Wednesday were tempered by this week’s EIA report showing an unexpected rise in crude inventories and the largest weekly gain since April.
  • Given this news broke around the same time that OPEC+ affirmed it will not raise output, it was enough to see oil prices retreat in the late session in US time.
  • Crude declined from US$72.40 back down to USD$70 before moving back up to US$71, where it stabilized at the open of the Asia session.
  • Brent too followed a similar path declining from US$76 down to US$73.80 before stabilizing at US$74.70.
  • For WTI futures, resistance at the 50-day EMA, at $71.62, has been pierced. A clear breach of this EMA is required to highlight a stronger reversal that would open $76.40, the Aug 26 high.
  • Oil markets are in watch and wait mode, expecting a retaliatory attack by Israel.  Citibank research estimates that a major strike by Israel on Iranian oil exporting capacity could take out up to 1.5m barrels a day and even a hit on minor infrastructure could see between 300k to 450k of supply interrupted (source BBG).
  • President Joe Biden has made it clear that there was no support from the US for Israel to attack Iran’s nuclear facilities in retaliation for yesterday’s missile attacks. 
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  • Ongoing Middle East tensions on Wednesday were tempered by this week’s EIA report showing an unexpected rise in crude inventories and the largest weekly gain since April.
  • Given this news broke around the same time that OPEC+ affirmed it will not raise output, it was enough to see oil prices retreat in the late session in US time.
  • Crude declined from US$72.40 back down to USD$70 before moving back up to US$71, where it stabilized at the open of the Asia session.
  • Brent too followed a similar path declining from US$76 down to US$73.80 before stabilizing at US$74.70.
  • For WTI futures, resistance at the 50-day EMA, at $71.62, has been pierced. A clear breach of this EMA is required to highlight a stronger reversal that would open $76.40, the Aug 26 high.
  • Oil markets are in watch and wait mode, expecting a retaliatory attack by Israel.  Citibank research estimates that a major strike by Israel on Iranian oil exporting capacity could take out up to 1.5m barrels a day and even a hit on minor infrastructure could see between 300k to 450k of supply interrupted (source BBG).
  • President Joe Biden has made it clear that there was no support from the US for Israel to attack Iran’s nuclear facilities in retaliation for yesterday’s missile attacks.