Crude oil prices staged a local rally on Tuesday, with Brent registered daily highs above $59.60 though failed to challenge the $60 psychological barrier. Today, the futures have settled marginally below the above mentioned highs, struggling to maintain the bullish bias.
The market received a portion of positive industry news, with the OPEC+ coalition achieved in July a compliance rate of 159%, which is 22% higher than in the previous month. Moreover, the producers have achieved an average compliance level of 134% since the beginning of this year, which is the highest to date.
Meanwhile, the API report showed that crude oil inventories declined last week by 11.1 million barrels versus the expected draw of 2 million barrels. Now, traders hope that the official data from the EIA will confirm the bullish picture, in addition to a massive decline in the number of active US rigs for oil, by 16 to 754 last week.
Despite these positive drivers, the upside potential for Brent is still limited due to the lingering trade tensions between the US and China and persistent recession fears. Technically, the barrel remains vulnerable to losses as long as the prices stay below the $60 handle.