Strong oil bid continues
|USOil, H1 and H4
USOil stormed to new major trend highs above $72.00. The benchmark is presently showing a 0.9% gain on the day, at $72.14, earlier posting a post-November 2014 peak at $72.24. The UKOil benchmark has also traded north of the psychological $80.00 as the spread widens between the two benchmarks. News that France’s Total might abandon a major gas project in Iran, although breaking yesterday, has continued to resonate in market narratives, which now seem more concerned about the pending Iranian supply drop when U.S. sanctions come into effect. Crude markets are continuing to adjust to a new era of Mideast geopolitical tension and risk of escalation. There are many counter narratives, with one of note focusing on the potential for demand destruction (when oil prices reach levels that drive end users to reduce consumption and/or increase efficiency) after the IEA yesterday trimmed its projection for global oil demand growth. However, the bigger than expected draw down in US inventories yesterday also added to the bid side. The shorter term intra-day trend remains very positive. The close of the H1 candle and H4 candle at 20:00 hrs and 21:00 hrs respectively yesterday at $71.15 triggered the simple EMA Crossing Strategy for multiple consecutive positions supported by the rising and aligned moving averages.
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