Crude oil prices rose on Monday, with Brent touched a high of $66.30 but failed to stay elevated above the $66 threshold. Today, the prices are retreating, clinging to the $65 mark. The sentiment in the market continues to depend mainly on the risk trades.
Risk-on tone has abated on Tuesday as Chinese officials have set the lowest growth target in nearly three decades and warned of ‘tough’ challenges facing the world’s second-largest economy.
The country’s growth was set at 6.0 to 6.5%, down from a target of 6.5% last year. This fueled concerns over the global growth and the prospects for global oil demand later this year.
Investors are also nervous due to lack of fresh news and details on the US-China trade relations. On the other hand, hopes for striking a deal later this month will likely continue to underpin the oil market and risk sentiment in general during the coming weeks.
In the short term, Brent needs to hold above the $65 figure in order to make fresh bullish attempts above $66. The key resistance comes at $66.50, while on the downside, the intermediate support lies around $64.85.