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Pre-Weekend Short-Covering, Persistent Supply Concerns Drive WTI Recovery

OIL
  • Plenty of market interest in the sharp recovery for oil prices across Friday morning trade - with WTI prices now back to Wednesday opening levels and narrowing the gap with the post-Israeli conflict highs on Monday at 87.24. Clearance here puts WTI at the best levels since Oct4, opening 88.27 for direction.
  • There have been no major specific developments to drive oil higher this morning, but the instability and uncertainty ahead of the weekend could be driving short-covering ahead of the weekend and as the IDF call on civilians in the northern part of the Gaza Strip to leave their homes and flee to the south amid apparent preparations for a ground invasion. Hamas urged residents to ignore the Israeli order.
  • Other supply side issues remain a supportive factor: Russia and Saudi stressing their intent to maintain output cuts until the end of the year, stronger sanctions pressure from the US after enforcement against two vessels this week found to be in breach of the G7 $60/bbl Russian oil cap.

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