Oil Eases After De-Escalation in TensionPosted 01/10/2020 9:22AM CT |
Oil sank the most in three months after rising nearly 5%, extracting most of the risk premium that had been built into the market following the killing of the top Iranian general, Qassim Suleimani. Oil reversed after the Islamic Revolutionary Guard Corps claimed responsibility for the missile strikes in Iraq earlier in the week with the administration stating that no one had been killed and that Iran was appearing to ‘stand down.’ In addition, a rather substantive build in inventories further weighed on prices. However, with the prospect of de-escalation and no imminent threat of an impact on oil supply look for oil prices to stabilize, which may further be buoyed by improved demand sentiment. The market is signaling immediate term oversold within its bullish trend with today’s range seen between 58.97 – 64.10.