Brent: Stumbles After Brief Rebound
MarketPulse | Jun 11, 2019 12:32PM ET
The oil price rebound may have already run into a little snag, with Brent running into some resistance around $64.50 on Monday.
The rebound in recent sessions had been attributed to the US/Mexico deal on the border to avoid tariffs, improved overall sentiment and suggestions from Saudi Arabia that an extension was effectively guaranteed.
The latest stumble may prove to just be some early profit taking but there is a feeling that there’s more to it. There still appears to be little idea of how much Russian involvement there’ll be in an extension and with the date of the OPEC+ meeting now looking like early July, perhaps producers are looking to make a decision with one eye on the outcome of the Trump/Xi meeting.
The charts potentially support this uncertain and cagey approach, with price having fallen more than 15% in just a week between late May and early June. The recovery seen since has hardly been significant before running into resistance around $64.50, which may suggest traders are nervous about two events later this month/early next – the G20 at which Trump and Xi will discuss the breakdown in trade talks and the OPEC+ meeting.
That’s not to say we won’t climb higher here and a break above this week’s high could bring $67-68 into focus, with it being prior support and resistance. But without firm suggestions that a US/China deal or a significant cut extension is secured, I struggle to see oil traders getting too excited.
Should we head lower then the area around $60 will be interesting, with it having run into support around here on numerous occasions since late December. Brent has struggled to hold below $63 so far though so perhaps if this can hold, it will be the trigger for another test of the lows.
/h2
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.