OIL: Oil Summary at European Close: Crude Rises
Crude prices have rallied after talks between the US and Iran failed to result in a deal while a US blockade on Iran-linked flows through the Strait of Hormuz has now come into effect.
- Brent JUN 26 up 6.2% at 101.09$/bbl
- WTI MAY 26 up 6.1% at 102.5$/bbl
- The talks ended in a stalemate as the US demanded a total cessation of Iran's nuclear program-a maximalist position according to Iranian Foreign Minister Abbas Araghchi.
- US forces will now begin intercepting vessels entering or departing Iranian ports. This could halt an estimated 2mb/d of Iranian-linked flows that had been slipping through the Strait.
- Saudi Aramco is set to ship around 20mbbl of oil to customers in China for May, down from 40mbbl in April, Bloomberg said.
- Saudi has restored the East-West pipeline to 7mb/d after a strike last week damaged one of 11 pumping stations and cut throughput by 0.7mb/d.
- Russian loadings from Transneft’s Sheskharis terminal, Novorossiysk in the Black Sea - remain limited following Ukraine attacks according to Bloomberg sources and shipping data.
- Iran is holding 21 million barrels of crude in floating storage in the Gulf of Oman according to TankerTrackers, which should buy a short buffer against the U.S. blockade coming into effect later today.
- The April OPEC Monthly Oil Market report shows global oil demand growth unchanged while production showed a record drop in March after the effective halt to Strait of Hormuz transit.
- Three tankers excited the Middle East gulf over the weekend, Kpler said while the US Central Command began mine-clearing operations on Apr. 11.
- OECD commercial crude inventories could fall toward operational minimums by early-May, according to JP Morgan.
- The amount of crude oil held on tankers that have been stationary for at least 7 days fell 35% w/w to 89.13m bbl as of April 10, according to Vortexa data cited by Bloomberg.
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FED: MNI Fed Preview - March 2026: Navigating A Narrow Strait
We've just published our preview of the March FOMC meeting - Download Full Report Here
- The FOMC will hold the Federal Funds rate at 3.50-3.75% for a second consecutive meeting in March, in what increasingly looks like a prolonged pause before the next move.
- The outlook for policy changes has been complicated by events in the Middle East. With energy prices soaring, markets have swung from anticipating two 25bp rate cuts this year to now not even pricing one fully.
- The updated Dot Plot is likely to show the same median expectation for the rate path as December’s, including one 25bp cut by end-2026, which combined with a largely unchanged statement will effectively maintain the easing bias.
- Incoming data for the year so far won't allay hawks’ skepticism that inflation is headed sustainably to 2%, and while job gains remain soft at best, the labor market hasn't deteriorated to the point once feared.
- The threat posed to both dual mandate variables from the conflict in the Middle East gives policymakers even more reason to wait and see how things develop.
- We suspect that most on the FOMC, including the core leadership, will be more concerned with the potential demand destruction from the ongoing energy supply-side shock, than with the inflationary implications.
- But this is no time for pre-emptive action given inflation remaining above-target and expectations beginning to pick up, and it will take some months before a case can be made to resume easing.
- (MNI’s separate preview of sell-side analyst summaries to follow on Monday March 16)
USDCAD TECHS: Clean Break of 50-Day EMA
- RES 4: 1.3845 High Jan 22
- RES 3: 1.3800 High Jan 23
- RES 2: 1.3753 High Mar 03 and key resistance
- RES 1: 1.3691 / 3742 50-day EMA / High Mar 13
- PRICE: 1.3737 @ 16:40 GMT Mar 13
- SUP 1: 1.3526 Low Mar 09
- SUP 2: 1.3482 Low Jan 30 and the bear trigger
- SUP 3: 1.3420 Low Sep 25 ‘24
- SUP 4: 1.3400 50.0% retracement of the 2021 - 2025 uptrend
USDCAD is firmer, however remains inside the recent range. The pair looks to have made a clean break of resistance at the 50-day EMA. The break highlights a breach of both the 20- and 50-day EMAs and signals a stronger bull cycle. This opens the 1.3800 level initially, the Jan 23 high. For bears, a reversal would refocus attention on 1.3482, the Jan 30 low and bear trigger.
AUDUSD TECHS: Monitoring Support
- RES 4: 0.7284 High Jun’22
- RES 3: 0.7256 2.500 proj of the Nov 21 - Dec 10 - 18 price swing
- RES 2: 0.7208 61.8% of the Feb 25 ‘21 - Apr 9 ‘25 bear leg
- RES 1: 0.7187 High Mar 11 and the bull trigger
- PRICE: 0.7003 @ 16:31 GMT Mar 13
- SUP 1: 0.7000 Low Mar 13
- SUP 2: 0.6963 50-day EMA and key support
- SUP 3: 0.6897 Low Feb 6
- SUP 4: 0.6834 Low Jan 23
AUDUSD has pulled back further from Wednesday’s high. For now, the move down is considered corrective and attention turns to key support at 0.6963, the 50-day EMA. A clear break of this average would undermine the current bullish theme. Note that the moving average set-up is in a bull mode position signalling a dominant uptrend. A resumption of gains would open 0.7208 next, a Fibonacci retracement point.
