Crude Firms Above Support as Geopolitical Risk Lifts Cracks and Spreads

Crude was higher yesterday on increased geopolitical risk premia as Venezuelan tankers continue to be targeted, and Russian Oil assets continue to be struck. Russian refinery runs from Dec. 11-17 were down 190k bpd WoW, largely due to outages at the major Yaroslavl refinery. Strikes at Yaroslavl have reportedly knocked out 250k bpd of Crude Oil processing volumes. The news is mainly bullish the distillate complex, and Crack spreads are rising.

The rise in cracks is being followed by time spreads, which have started to form a tradeable bottom. A firming in the cash markets is needed in order to firm up futures prices, and seeing spreads rally is a good sign for the bulls.

Technical Analysis:

Futures settled above major support at 57.82*** and the 20-Day moving average yesterday. Overnight volume was thin, with accumulated volumes far below the 20-Day moving average at this time. 58.27-58.50*** is the next line in the sand for the bulls, and we’ll suredly get a retest here into the US session.

Volumes remain thin on holiday trading while geopolitical catalysts remain volatile. Outsized trading ranges could be possible through the end of this week.

Check out the charts to this article here: Crude Firms Above Support as Geopolitical Risk Lifts Cracks and Spreads - Blue Line Futures

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