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  • Bulls in control amid rising US-Iran geopolitical tensions, Russian exports cut.
  • Surging US supplies, USD strength to keep a check on the upside?

Oil prices on both sides of Atlantic trade firmer so far this Thursday, with Brent (the European energy benchmark) having surpassed the 75 level for the first time since end-October while the US oil (WTI) is seen crawling back towards the YTD highs at 66.60.

The buoyant tone seen around the black gold is mainly driven by intensifying supply disruption concerns that could lead to tighter global oil markets. The latest report that quality concerns forced the suspension of some Russian crude exports to Europe  added to already persisting supply risks amidst ongoing US-Iran geopolitical tensions. Recall that the US announced its decision to call off the sanction waivers on the Iranian oil importers earlier this week.

Reuters quoted trading sources, as citing “Poland and Germany have suspended imports of Russian crude via the Druzhba pipeline, citing poor quality. The Czech Republic had also halted purchases.”

Despite the upbeat momentum, WTI lags its European peer, as markets remain wary about the surge in the US production and stocks level. The US American Petroleum Institute  (API) weekly crude inventory report showed on Tuesday that the US crude stocks rose more-than-expected by 6.9 million barrels last week. Meanwhile, the US commercial crude inventories last week soared to 460.63 million barrels, their highest since October 2017, according to the latest EIA data showed.

Further, ongoing broad-based US dollar strength also continues to remain a weight on the USD-sensitive WTI. The focus now remains on the US durable goods data for fresh dollar trades and its eventual impact on oil prices while fresh oil markets-related headlines will continue to influence the commodity.

WTI Technical Levels

Brent Technical Levels