Crude Breaks Above December Highs

Red Sea Tensions Underpinning OilOil prices are softening a touch ahead of the US open on Friday. However, crude futures are still on course to end the week in the green and are currently trading above the December highs, keeping the focus on further upside near-term. Oil prices have seen fresh upside pressure recently linked to ongoing tensions in the Red Sea. Attacks on ships by Houthi rebels have caused major disruption to global shipping routes, having a sharp impact on crude delivery times and supply chains. With the situation highly volatile and no closer to a resolution, crude prices look vulnerable to further upside on any news linked to further violence in the region.US Data & China Stimulus Supporting CrudeDevelopments in the US are also helping underpin crude prices this week. A slew of better-than-forecast US data has helped revive demand for crude. Midweek, the US manufacturing sector was shown to have climbed back into positive territory for the first time since April 2023. Additionally, yesterday’s first look at Q4 came in well above forecasts. With clear signs that the US economy remains robust, despite expectations of a slow-down, crude bulls are feeling encouraged near-term, which should keep the focus on a continuation higher for now particularly with news of expected Chinese stimulus also helping buoy sentiment.Technical ViewsCrudeThe rally in crude has stalled for now into a test of the 77.64 level. With momentum studies bullish, however, the focus remains on further upside while 72.61 holds as support. 82.59 sits above as the next objective for bulls on a breach of current resistance.