Turkish concerns drive oil prices up

Yesterday was a record day on the oil markets with both US WTI & Brent reaching new peaks.

In the US oil traded at $89.57 and Brent touched $84.72 before retreating to the $84.50 region at the close.

The key drivers of this move remain the concerns over the tightness of supply, the Turkish/Northern Iraq dispute and speculative buying. OPEC have cited investor action as the catalyst for the move and mixed rhetoric from the cartel members with regard to fresh increases in production are likely to offer no respite from the current bullish run.

In the absence of developments in any of the above factors the market is set to retreat on end of week profit-taking in a consolidating pattern. Given the influence of the geopolitical risk centred in the Middle Eastern arena it is certain that traders will not want to be short over the weekend and thus the positive tone will endure.

With key support around $82.80/83 and no real resistance before the $90/bbl level a daily trading range of $83.50-$85 looks to be in prospect.