EBC Markets Briefing | Crude prices edge up despite surprise gain in US crude stock

Crude prices regained its footing on Friday as trader weighed renewed attacks on Iran. The US will engage in "technical talks" with Iran and remains committed to finding a solution to the conflict, an official said.

To stabilize its domestic fuel market following systemic Ukrainian drone strikes on oil refineries, Russia implemented a diesel export ban on Wednesday to combat rising prices and gasoline shortages.

Governments will buy millions of barrels of oil through 2028 to replenish emergency reserves. Experts note this surging demand will help absorb the global supply surplus expected from OPEC+'s planned production increases.

Analysts note that cheaper oil could prompt China to expand its stockpiles. This behaviour, alongside reserve replenishment by IEA nations, would establish a secondary pillar of global demand.

Although Saudi Arabia, Kuwait, Qatar, Iraq, and Bahrain are resuming oil production and exports, it will take years for some to fully repair the extensive infrastructure damage caused by Iranian attacks.

US crude oil inventories rose by 3 million barrels last week, according to the EIA. This marks the first increase in inventories since April, although levels remain near their lowest in approximately four years.

EBC Financial Group analyst says, Brent crude showed a shooting star pattern, so substantial selling pressure was still sitting overhead. If it fails to close above 200 SMA, another leg lower could ensue.

Asset recap

As of market close on 9 July, among EBC major products, Lam Research Corp shares led gains as Morgan Stanley analyst raised the firm's price target to $404 and kept an Overweight rating.

Costco has been hit with a class action lawsuit alleging that one of the products it sells contains "dangerous" levels of heavy metals, including lead, arsenic and cadmium.

US natural gas fell to a six-week low on expectations gas flows to LNG export plants will remain low through late August due to planned maintenance at a plant in Texas.

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