The oil market is showing some strength in the early morning following a weekly reversal from a three month high. This comes amid possible supply disruptions in Iraq following instability in the southern cities of Basra and Umm Qasr. Emerging market risk as well as ongoing trade tensions have continued to weigh on prices, however, strong Chinese demand has provided some support. Reports over the weekend showed China’s August crude oil imports rose 6.6% from July. U.S. sanctions on Iranian oil are set to be in effect in November with further tightening expected this month to around 1.5 million barrels. Libya’s National Oil corporation in Tripoli was targeted this morning, which may have greater implications for disruptions in supply. Demand continues to remain strong with any geopolitical easing along with a risk on sentiment in equities could continue to reinforce higher price action. Near term support comes in around 67.20 with resistance around 68.50.
Crude Oil Oct ’18 Daily Chart