Oil climbs above $77 again, eyes on the Red Sea

<p>Oil erased earlier losses and rose as high as $77.64 before retracing by 40-cents.</p><p>It's been a bounce-back week for oil as it trades at the best levels since late November. This week's US oil inventory report showed a counter-seasonal draw, though that was largely due to cold weather. </p><p>A report today said OPEC wouldn't change production levels at next week's monitoring meeting ,which isn't a big surprise. However OPEC may see tightening global balances at the moment and feel a bit better about the picture. Moreover, signs of stimulus from China and strong US growth are tailwinds to consumption, particularly in aviation.</p><p>Key for oil is a close above $76.18 today. Assuming that, eyes will be on whether oil can get back above $80, where oil topped out in mid-to-late November. Estimates for weekly oil inventories next week should start trickling in over the next few hours and that could jar oil into the close.</p><p>Beyond that, we will be watching for whatever happens in the Red Sea and Iran on the weekend.</p>

This article was written by Adam Button at www.forexlive.com.