Brent crude registered fresh mid-September highs around $66.20 on Tuesday but failed to confirm a bullish break and finished below $66. Today, the futures struggle to resume the ascent and hint toward a potential bearish correction, though in general, prices stay elevated within the upside trend.
Rejection from fresh highs was due to overbought conditions coupled with stronger dollar. Also, the API report disappointed market participants as the data showed the US crude oil inventories rose 4.7 million barrels last week. Moreover, gasoline stockpiles jumped the most since January, by more than 5 million barrels. Now, traders hope that the official EIA report will show more bullish results. If so, Brent could receive a local lift but to get back above the $66 handle, the market may need positive investor sentiment in the global financial markets in general.
After fresh record highs in Wall Street, Asian stocks traded lower on Wednesday, as the renewed no-deal Brexit concerns coupled with the lack of trade-related news curbed risk appetite. Against this backdrop, another bull run in the oil market will hardly take place any time soon. Besides, there are some overbought signals in the short-term timeframes. So traders will probably prefer to see lower levels to reenter the market with long positions. On the downside, the initial target comes around $65.