Fresh US/Iran Attacks

It’s been a volatile week for crude prices with the market see-sawing in response to incoming headlines around developments in the Middle East. Crude futures spiked yesterday as President Trump declared the ceasefire with Iran over and vowed to take heavy action. However, prices are now cooling again this morning after Trump later posted online saying that Iran had reached out to establish a new agreement. This comes on the back of days of tit-for-tat strikes between the US and Iran including Iran targeting US military sites in neighbouring countries. Nevertheless, price action today suggests traders are hopeful that tensions can be walked back following Trump’s disclosure.

Headlines On Watch

For now, traders await further headlines with the situation remaining highly volatile and oil vulnerable to fresh upside moves accordingly. If the ceasefire looks to be back in place and both sides recommit to the peace process this should allow oil to cool further. However, if we hear any news of fresh attacks or if rhetoric turns more sinister, this should see oil pushing higher again near-term.

EIA Inventories Jump

Crude oil has also come under pressure following the latest EIA data release yesterday. The group reported an unexpected surplus in US crude stores of 3 million barrels, this was in stark contrast to the 2-million-barrel drawdown forecasted and marks a sharp shift from the prior week’s 3.8-million-barrel decline.

Technical Views

Crude

The spike in crude yesterday saw the market pushing back up towards the 77.65-level though the move has since run out of steam. While above 70.76, a fresh attempt at the level is still likely. Below there, focus turns to 65.38 and the bull trend line just beneath.