WTI Crude Oil Technical Analysis
Crude oil markets have pulled back just a touch early on Wednesday, as the Light Sweet Crude market has rejected the $105 area.
Saudi Arabia has found an alternative export route via Oman’s Sohar port, partially alleviating some of the fears created around Yanbu and the damaged Saudi East-West Pipeline.
U.S. inventories appear bullish, and that will have more of an influence here specifically, as the API reported a massive 7.1 million-barrel crude draw, which is the exact opposite of what the market had been looking for. The EIA numbers come out later today. That will be crucial as well.
Geopolitics continues to be an issue, so there is still a tug of war. Ultimately, this is a market that still has plenty of reasons to be panicky, but we are a little stretched.
Brent Technical Analysis
The Brent market looks very much the same. The inflation situation is kind of a feedback loop here. Brent looks very much like a market that is going to continue to watch the Saudi Arabia story.
The physical market is starting to show stress. European refiners are searching for replacement barrels after the Saudis have canceled some shipments. Norway is starting to see an unusually large premium to its stockpiles of oil, so that continues to be an issue as well.
This is more or less an EU problem. Still, oil is one of those situations where I think we have to look at it through the prism of: if it pulls back, it is more likely than not going to be sensitive to the next bullish headline.
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