Brent crude prices reach high
Investment flows into Brent crude saw prices touch an eleven month high of $76.63/bbl yesterday.
The upward momentum remians strong and a test of last Augusts $78.65/bbl high looks a good prospect as all eyes focus upon the EIA data released in the US later today. The analysts polls point to small builds in crude and gasoline stocks but any divergence from these expectations on the downside will unlock further upward impetus. In particular, the refining capacity number will be very much to the fore.
The recent upward move - attributed to North Sea maintenance issues and terrorist activity in Nigeria - reflects the systemic changes to the industry and residual geopolitical risks that have been the key price drivers since 2002.
The IEA report released on Monday articulating the growing global demand in the context of these factors served only to exacerbate the situation. The tone of the IEA was unapolegetically bullish and over the coming months hard data will only serve to endorse the views expressed in the Medium Term Outlook.
A volatile day in prospect with the bias on the upside - the EIA weekly report is certain to be scrutinised for data that could be interpreted as bullish for the market and the ensuing upward move will surely test the key $78/bbl level. Support seen at $74.40/bbl
