Prices Recover Somewhat Driven By Geopolitics

Oil prices rose almost 1% on Monday after falling sharply at the end of last week. It was boosted by the conflict in the Middle East and Ukraine/Russia plus stronger-than-expected US data but the 0.4% increase in the USD index did keep a lid on prices. The US hit Houthi positions and missiles on the weekend and President Biden said that it will make further strikes, including on Iranian territory, if needed to defend US troops.

• WTI rose 0.7% to $72.80/bbl still a long way from resistance at $76.95, the February 1 high. It fell to $71.41 before rising to a high of $73.28.
• Brent broke above $78 to be 0.9% higher at $78.02/bbl. It made a high of $78.33 after a low of $76.62. Resistance is at $81.55.
• A drone attack on a refining facility in Volgorod in Russia, which Russia blames on Ukraine, has brought it offline and boosted diesel prices as a result. It refines around 300kbd of crude. There have now been a number of attacks on Russia’s energy processing infrastructure, as it generates income to fund its war in Ukraine. A large refinery in the US is also down.