There were multiple military flare-ups yesterday between Iran and the United States. We will repeat our note from yesterday regarding the positive tone around Iran and US diplomatic talks (driver of the downwards move Sunday night into Monday) – take all of this positivity as a grain of salt and do not get lulled into a false sense of security. Our view is that heightened military pressure on this Iranian regime is highly likely.
Yesterday, there were some early reports that Iranian gunboats made an approach and possible attempt to stop a US flagged oil tanker. Later in the day, the US shot down an Iranian drone in the vicinity of a US aircraft carrier. Iran has voiced a willingness to work with the West on their nuclear program, which they have said and gone back on consistently since the start of this nuclear deal. If there is a time for the West to attempt a regime change in Iran, the timing has never been better.
Last night’s API report showed extreme draws in crude oil at -11,000k bbls which is also helping to support futures. Today’s EIA report will be viewed closer than normally to see if that data is confirmed.
Estimates for today’s EIA report are as follows [thousand bbls]:
Crude: -474
Gasoline: +485.50
Distillates: -1,488
Refinery Utilization: -1.03%
Technical Analysis:
Futures are trading into key support at 62.59-62.92*** this morning. Yesterday’s bounce was aided by headlines, but the fact buyers were ready and willing around the 61.01-61.28*** level helps aid our confidence. If we hold the 62.59*** level today, a higher consolidation above here would give aid to the longer-term bull story.
Check out the charts to this article here! Geopolitical Risk Builds as Crude Holds Support - Blue Line Futures
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