Crude oil prices are trading in a subdued manner despite some bullish bias as traders are cautious ahead of major global events this week, which will affect all asset classes including oil. Brent has settled above the $59 handle but will hardly be able to make a clear break above $60 in the short term.
Brent will likely stay in a consolidation pattern in the near term ahead of API and EIA data, the upcoming FOMC meeting minutes and this years’ Jackson Hole Symposium, which will set the tone for all risky assets. The risk factor for oil is the potentially less dovish than expected tone from the Federal Reserve and its governor Powell. In this case, the greenback will rise across the board, which in turn could curb oil demand.
In the immediate term, Brent may stay above $59 as the market is supported by stimulus measures delivered by the Chinese central bank and hopes for a breakthrough in the US-China trade negotiations after the US Commerce Department renewed a temporary general license that permits American companies to sell products to Huawei on a limited basis.