Oil prices failed to confirm a break above the $60 handle and slipped back below $59 on Friday. Today, the prices are making some recovery attempts but the selling pressure still persists as investors show a cautious tone amid the ongoing Brexit turmoil, US-China trade frictions and weak economic data.
As such, the British parliament delayed a crucial vote on a Brexit withdrawal deal. In the latest news, the UK Chief Treasury Secretary Rishi Sunak noted that the government will introduce Brexit legislation shortly. As such, uncertainty on this front remains elevated despite the risk of a no-deal exit has declined substantially.
In other news, Chinese Vice-Premier Liu He said the US and China made concrete progress in resolving their trade issues. On the data front, Japan’s exports fell in September for the tenth straight month, while South Korea’s exports for the first twenty days of October declined by nearly 20% year-on-year. The figures highlighted the risks stemming from the trade war and capped investor optimism.
Against this backdrop, Brent will hardly be able to stage a decent and sustainable recovery any time soon, and bullish attempts may further attract sellers. Technically, the downside risks could recede partially in case of a decisive break above the $60 psychological handle.