The U.S cruise missile strikes have seen crude oil jump over two percent in a straight line with both Brent and WTI testing resistance.
The situation remains fluid in Syria at the moment as the implications of the massive cruise missile strike from the United States gets digested. Among the most pressing questions will be,
- Is this a one-off attack and are other nations going to join in?
- What will be the response of Iran and Russia? Two of the world’s largest oil producers and staunch allies of the Assad regime.
- What will be the response of the North Koreans and indeed the Chinese? This is a clear message to them as well.
All of this adds up to potential turmoil in the world and also to potential supply disruptions to crude which have reacted as expected and moved materially higher. We will have to wait for these answers as the day moves on, but unsurprisingly, it would be expected that both crudes will remain bid on any dips.
Brent spot is trading at 52.60 a barrel and has major resistance just above at 57.00, a daily close above here opening a possible technical move to the 60.00 area.
WTI spot is trading at 52.30 a barrel testing resistance right here. A break opens a technical move to the long-term resistance at the 54.50/55.00 level.
The market will be very much headline driven today, what is not in dispute is that safe-haven flows will be the theme of the day.