Crude oil prices registered the first weekly gain after two weeks of steep losses that brought Brent to five-month lows below the $60 handle. The market entered the bearish territory last week and found some bids as the general risk sentiment improved. As a result, Brent finished above $63 but struggles to extend the rebound on Monday as traders remain cautious.
Riskier assets, along with oil futures, received a boost from two key factors. First, a softer rhetoric on the US-Mexico trade front has partially eased concerns over global trade wars, while lack of progress in the US-China negotiations capped the optimism. Second, a more dovish Fed’s stance increased the odds of the US monetary policy easing this year.
In the short term, the market will likely try to stay afloat and refrain from another sell-off. But considering the lingering risks in the trade front, Brent could attract some profit-taking at more attractive levels. The immediate upside target now comes around the $64 threshold. Should risk sentiment remain relatively positive, the futures will be able to hold above $63 in the near term.