​EBC Markets Briefing | Oil prices falter; memory crunch pummelled Cisco

Oil prices were little changed on Friday, and are set for their second weekly decline, on easing concerns about a full-scale war in the Middle East and on forecasts supply will exceed demand this year.

The prospect of a US attack on Iran has roiled oil prices this year, but analysts say strike would require more military commitment. Trump said this week he was considering sending a second aircraft carrier to the region.

Iran has said it is willing to discuss limits on its nuclear programme in exchange for sanctions relief but called negotiations over its missile capabilities "non-negotiable."

The IEA on Thursday projected in its monthly report that this year global oil demand growth will be weaker than previously expected, with overall supply set to exceed demand.

Crude inventories dropped by 1.3 million barrels in the week ended 12 December, the EIA said, compared with expectations for a 1.1 million-barrel draw. Gasoline and distillate stockpiles rose more than expected.

The Kremlin said it is actively discussing assistance to Cuba. Cuba's leadership warned on Sunday that international airlines would no longer be able to refuel in the country due to aviation fuel shortage.

WTI crude moved sideways above its 200 SMA which seems a major support level. If without a decisive break, the price is seen to rally towards $64 in the upcoming sessions.

Asset recap

As of market close on 12 February, among EBC major products, American Tower shares led gains. A number of institutional institutions have increased their exposures to the company.

Cisco Systems shares had the worst day since 2022 as rising memory prices put pressure on its margins. Strong demand for AI data centres has led to a global shortage of memory.

Tech shares bore the brunt of selling as investors rotated out amid concerns that AI could shake up the sector. Friday's CPI report is now in the spotlight, which will offer more clarity on Fed's policy path.

EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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