February Nymex crude prices fell back sharply yesterday as Eurozone debt concerns led to a raft of selling in the EUR/USD despite earlier strong Italian auctions where yields were around half as much as previous auctions, but later rose again. Equity indices were scythed led by commodity related stocks. The breast-beating from Iran of threats to close the Straits of Hormuz were quickly negated by the US announcing that the 5th fleet would ensure the Straits remain open effectively unwinding Tuesday’s rally up through $101. An unexpected huge build in crude inventories reported by the API last night compounded the fall. Analysts were looking for a draw of around 2.5mmbl but the release reported a build of 9.57mmbl. The WTI contract opened yesterday at $101.25 edging up in Asia to $101.71 before falling back sharply to $99.11, closing the session at $99.36. Asian markets traded $99.23-83 this morning with the rate settling around $99.50. Support is at $98.51 and $97.30 with resistance at $100.41 and $101.42. This afternoon’s EIA data will be closely watched for confirmation of yesterday’s API build.
EasyForexNews Research Team