Crude oil pulls back from Sunday's highs

31 ม.ค.

Oil prices continue to pull back from the two-month highs hit on Sunday night. Despite this, front-month WTI and Brent are still above prior resistance (now support) levels of $75 and $80 respectively. These levels marked the upper end of a trading range which had developed since the beginning of the year. But prices broke above here last week, helped by fears that global supply could be affected by Ukraine’s targeting of Russian energy infrastructure with drones and missiles. Meanwhile, there’s been no let-up in hostilities across the Middle East. But these have had little effect on prices so far, as the violence hasn’t interfered with energy production. There is additional uncertainty following the deaths of three US service personnel in Jordan over the weekend. The Biden administration threatened a response, but has yet to deliver one. This bolsters the view that all sides are being relatively careful when it comes to actions which could lead to an escalation ij hostilities. Crude prices briefly rallied yesterday after the IMF raised its global growth forecast. At the same time, Saudi Arabia ordered Saudi Aramco to maintain its oil production capacity at 12 million barrels per day (bpd), rather than raising it to 13 million bpd by 2027 as previously planned. Today’s update on US inventories from the Energy Information Administration showed a build of 1.23 million barrels of crude – well above the expected draw of 225,000 barrels. But there was a much larger-than-expected draw of distillates, while the gasoline build was below expectations. Oil prices spiked briefly, but the gains evaporated quickly. The 4-hour chart of the oil ETF shows a dip in the MACD suggesting that there’s a slowdown in upside momentum.