Crude oil prices continue to rise on Tuesday, and in the latest move, Brent has pierced the $79 handle and stays elevated despite the signs of overbought conditions start to emerge in the daily charts. The market sentiment remains firmly positive, with Brent has accelerated its ascent even as the greenback demand has picked up today.
Traders continue to push the barrel closer to the key $80 threshold as the fundamental picture remains bullish amid the upcoming US sanctions on Iranian oil exports. The fact that supplies from the third biggest OPEC producer have been already declining quite rapidly supports crude prices amid expectations of further market tightening. This factor continues to serve as a “safety cushion” for the market in the medium term.
However, to get firmly back above $80, Brent needs some additional catalysts and drivers. By the way, traders should be more cautious at this stage as the market ignores the downside risks including the upcoming US-China trade war escalation, emerging market turmoil and more positive sentiment around the greenback. So as soon as investors shift focus to these risks, oil prices could rapidly change the course and retreat from nearly two-month highs around $79.30, down to $77 or even lower.