December 6, 2022

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Oil trades at $69 with eyes on the strange coincidences in Iran

1 min read

Who started the fires?

Who started the fires?

In the span of a few hours, the heaviest ship in Iran’s navy caught on fire alongside a refinery in Tehran. The ship sank but the flames at the refinery were contained to 18 storage tanks, according to local reports, who also said it was due to a leak in pipelines.

Two fires would be an odd coincidence but it’s especially odd given ongoing nuclear negotiations and a recent explosion at a nuclear facility.

The New York Times speculated that Israel was involved and the oil market climbed. WTI hit a fresh cycle high at $69.40 and brent rose to $71.99.

Both are down about 40-cents from then but have risen after the US APD employment report showed an acceleration in hiring. That’s something that could be a precursor to unexpectedly strong demand.

Late yesterday, the API report showed an unexpectedly large draw in oil and we will get the official data at 1500 GMT.

On the chart, WTI has broken out but I think it’s brent that matters. It’s flirting with the 2020 high and is $4 from the 2019 high.

brent crude

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