OIL: Crude Starts Today Higher After Reports Israel Plans To Strike Iran

Oil traded in a narrow range on Tuesday and finished slightly higher. It continues to monitor geopolitical developments and especially Iran. Iranian President Pezeshkian said it won’t give up its non-military nuclear programme and Ayatollah Ali Khamenei voiced his doubts that the talks with the US will result in an agreement. 

• Oil is also watching the situation in the Middle East for a deterioration in an already fraught situation. Israel has attacked Yemen’s Houthi rebels with the latter vowing retaliation and now CNN is reporting that Israel is planning an attack on Iran’s nuclear infrastructure which has driven WTI up 3.0% to $63.92, to break above the 50-day EMA, at the start of today’s trading.
• On Tuesday, WTI rose 0.2% to $62.25/bbl after a low of $61.48 and a high of $62.63 early in the European session. The benchmark is now up 8% this month. Initial resistance is at $62.90, 50-day EMA, while the bear trigger is $54.33.
• Brent traded between $64.85 and $66.00, approaching resistance at $66.42, yesterday and finished up only 0.1% to $65.59. It is 7.4% higher in May but this is still seen as corrective. The trend condition remains bearish. Initial support and bear trigger is at $58.00.
• After a previous large crude inventory build, Bloomberg reported that another 2.5mn barrels were added in the US, according to people familiar with the API data. However, gasoline stocks fell 3.24mn and distillate 1.4mn suggesting still robust demand. The official EIA data is out later today.