Oil Higher Midweek

Oil prices are turning higher once again today after news overnight that Iran targeted a US military base in Jordan with ballistic missiles. In response, the US and Saudi forces attacked Iranian backed militia in Iraq. The attacks mark the end of a 48-hr pause in hostilities after both the US and Iran stepped down form fighting on Monday. Trump had claimed that both sides had resumed talks, which he said were progressing well, though this was denied by Iran. The key thing now is whether fighting has resumed fully or if both sides will once again cease hostilities and attempt to restart the peace process. The move higher in oil today remains shallow for now suggesting traders remain optimistic that talks can resume. However, if fighting intensifies, this could lead a stronger surge higher in crude prices.

EIA Inventories Due

Looking ahead today, we’ll also get the latest crude inventories data from the EIA. The group is forecast to report a slight surplus of less than 1 million barrels which, if seen, should really have any market impact. However, if we see any extension on the prior week’s 2-million-barrel surplus this could help dampen price once again. However, barring any significant surprise in today’s data, the bigger focus will remain on developments in the Middle East for now, with incoming headlines remaining the key driver.

Technical Views

Crude

The sell off in crude has stalled for now into the 77.65 level with price now bouncing back towards the 84.60 level. While below here, focus is on a continuation lower with 70.76 the deeper bear target to note. If bulls get back above 84.60, focus turns to 95.06 next.