NYMEX crude trades in a narrow range above $65 per barrel amid mixed cues. Supporting price is risk premium amid tensions between Saudi Arabia and Iran. Also supporting crude is recovery in equity markets. However, weighing on price is record high US crude production.
A military coalition led by Saudi Arabia on Monday threatened retaliation against Iran after Houthi rebels fired a barrage of missiles from Yemen. Saudi forces said they intercepted seven missiles on Sunday. The Saudis accused their regional rival Iran of being behind the attack.
Market concerns about Iran are already high as US is considering withdrawing from the 2015 nuclear deal. If US withdraws it may impose additional sanctions on Iran which will affect oil industry as well.
Crude oil also benefitted from gains in equity markets on prospect of a deal between US and China to avert import tariffs announced last week.
Weighing on crude price is record high US crude production. US weekly crude oil production stands at record high level of 10.407 million barrels per day. US crude oil rig count has risen to 804 rigs, the highest level since March 2015.
Crude has been rangebound this week as market players await fresh cues to break past the recent high of near $66.5/bbl. Further cues will come from US economic data, weekly inventory report and development relating to US trade policies.