Stronger Greenback Weighs On Crude, Heading For Monthly Rise

Oil prices fell moderately on Friday weighed by the stronger US dollar (USD index +0.4%) to be little changed over the week, as prices peaked on Tuesday and then trended lower. Crude is headed to post a rise in March as demand expectations strengthened and uncertainties around supply grew.

• WTI held above $80 on Friday and finished down 0.3% to $80.82/bbl after an intraday high of $81.45. The break of $79.87, March 1 high, confirmed the resumption of the uptrend. Initial resistance is at $83.12 and support at $79.27.
• Brent also fell 0.3% to $85.56/bbl and is 4.5% higher in March. It broke above $86 to reach a high of $86.15 earlier. A bull cycle remains intact and the move down over the second half of the week is seen as corrective. Initial resistance is at $87.70 and support at $83.97.
• The focus returned to Russia’s energy sector with Ukrainian drones taking around 12% of refining capacity offline. In addition, India has said that it won’t take Russian oil on state-run Sovcomflot tankers because of sanctions. India is now the second largest buyer of Russian crude after China. Commentators are noting that sanctions are now impacting Russian exports and shipping costs.
• Iran-backed Houthis fired a missile at a Chinese-owned oil tanker sailing in the Red Sea on Saturday. The US said later shot down 5 of 6 Houthi drones. Shipping giant Maersk has said that it will continue to reroute vessels around southern Africa as the situation has not improved enough despite the presence of western navy vessels.