Crude oil, especially Brent, was trading higher this morning following news overnight that Libya's prime minister had been taken by a former Libyan rebel group on the grounds of "national security and corruption". This heightens the tension in the country which has only just begun to see its oil production pick up following weeks of disruption, during which time its production has slumped by more than one million barrels per day.
The premium over WTI crude has widened to USD 7.7/barrel, a previous level of resistance, not least due to the weekly inventory data from the US yesterday which showed the biggest rise in crude stocks in a year, mainly because of refineries reducing their operating rates to a five-month low.
As the charts below show both crude oil and motor gasoline inventories are now at or above their five-year range while production and imports continue to converge.
This should help limit the upside to oil prices but with the latest news from Libya the risk premium in oil just won't go away, leaving prices at higher levels than fundamentals may suggest. WTI Crude continues to find support towards the 100.5 -101.00 area while near-term resistance is today's pivot at 102.18, followed by 103.18.