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Oil struggles to make gains despite trade optimism
Commodities
11/27/2019

Oil struggles to make gains despite trade optimism

Crude oil prices shifted into a consolidation mode on Wednesday after a local rebound yesterday.

Crude oil prices shifted into a consolidation mode on Wednesday after a local rebound yesterday. Brent has settled above the $63 handle but has yet to confirm a breakout as the upside momentum looks unsustainable fragile. In the daily charts, the futures remain stuck between the 100- and 200-DMAs.


Oil market remains sensitive to trade-related headlines, with Trump’s positive comments on a so-called phase one deal providing some support to prices. On the other hand, as market dynamics shows, traders remain cautious. Also, the API data cap further bullish attempts, with the report showing a build in inventories by 3.6 million barrels last week. Now, traders are looking forward the official EIA report which could push Brent north should the results come in better than the private estimate.


In a wider picture, further direction in Brent still hinges on trade developments. As the December 15 tariff deadline looms, markets want to see a concrete progress in negotiations and striking a partial deal between the two countries. Otherwise, oil prices along with other risky assets could suffer decent losses amid concerns over the outlook for the global economy. In the short term, Brent needs to regain the $63.50 area in order to confirm a break above $63.

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