Brent Threatens $60 Again
Helen Rush | Feb 08, 2019 09:17AM ET
Crude oil prices resumed the downside move after a brief pause and could threaten the psychological support of $60 should the selling pressure persist. Brent is attempting to cling to the $61 handle but considering the general risk-off tone in the global financial markets, bearish risks could overweight in the short term.
Risk appetite soured as a senior US administration official said Trump and China's Xi Jinping are ‘highly unlikely’ to meet before March 1 deadline. Meanwhile, White House economic advisor Larry Kudlow said there's a "pretty sizable distance to go" before the U.S. and China reach a sweeping trade agreement. Not surprisingly, hopes of striking a trade deal before March 1 started to abate quickly, with risk aversion hit the markets across the globe, including commodities.
Another source of concerns for oil traders is the slowing global growth. The European Commission cut its outlook for euro zone GDP growth yesterday. Moreover, the Commission also revised the average oil price outlook lower by 20% from estimates made in autumn.
Against this backdrop, Brent may lose the $60 level for the first time this month, once the price fails to stay above $61 in the short term. On the other hand, the downside pressure should be limited due to sanctions against Venezuela and Iran. By the way, the US Special Representative for Iran Brian Hook said this week that Iran’s oil customers should not expect new U.S. waivers in May. In the medium term, this factor may support the market.
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.