| Commoditiy | Price | Weekly Change | 50day-Ave | 100day-Ave | 200day-Ave |
|---|---|---|---|---|---|
| Brent ($/b) | 63.51 | -0.36 | 62.57 | 64.11 | 65.73 |
| US WTI ($/b) | 58.98 | -0.52 | 58.56 | 60.18 | 62.27 |
| ICE Gasoil ($/MT) | 646.25 | 14.00 | 667.34 | 680.58 | 671.24 |
| Jet CIF NWE ($/MT) | 698.05 | 12.05 | 705.40 | 715.80 | 706.25 |
There was a lot of volatility last week related to Iran. Brent reached a high in the middle of the week, close to 87 \$/b as markets anticipated the possibility of the US engaging with military action on Iran. The market softened by the end of the week, Trump had said that he was satisfied that the Iranian authorities had reined in their response to protesters and Brent fell back, under 64 \$/b at times. Brent has softened again this morning currently trading under 63.50 \$/b.
Despite the slight softening 64 \$/b is a level a step higher than seen at the beginning of the year. Events relating to Russia and Venezuela remain a risk. There is potential for a ratcheting up of pressure on the shadow fleet of vessels used by Russia, Iran and Venezuela. It was notable that the UK provided some support to the recent US seizure of a shadow fleet tanker near Iceland, whereas it had previously distanced itself from the increasingly proactive US approach. There have been more reports that the British government has found a legal mechanism to support this kind of action. The Times reported that they could be detained under the “Sanctions and Money Laundering Act”. If so, this might pave the way for other European nations to follow suit, and this could jeopardise Russian crude and refined product exports through the Baltic. With its Black sea routes already at risk from Ukrainian drones, disruptions to exports from the Baltic, would be a further blow to Russia’s oil industry. There were reports at the weekend that a Russian tanker attempted to sail east up the Baltic was forced back by the German authorities and it sailed north around the coast of Norway instead.
Despite a softer start to the year for oil prices, the question now is if higher pries are here to stay. Brent broke through the 50, 100 and 200-day moving averages on the rally last week. There have been significant speculative short positions on oil futures recently, which can lead to spikes on any moves higher as the shorts are forced to buy to prevent further losses. The concern over possible disruption to oil flows is keeping the market on its toes. It might be hard to sustain higher prices unless there is actual disruption however, and Brent could fall back towards 60 \$/b.
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