Brent Oil: Pullback from 4-month highs stalls at 50-hour MA support
- Brent oil retreated from four-month highs seen yesterday, possibly on fading trade optimism.
- The repeated defense of the 50-hour MA, as seen in the last few hours, could fuel a re-test of highs above $68.00 hit yesterday.
Brent oil is currently trading at $67.58 per barrel, having defended the 50-hour moving average (MA) support, currently at $67.44, over the last 12 hours.
Prices clocked a four-month high of $68.18 yesterday after the American Petroleum Institute reported a surprise draw in crude oil inventory of 2.133 million barrels for the week ending March 15. The break above $68.00, also fueled by OPEC's decision to extend supply cuts to June, was short-lived, possibly due to fading trade optimism.
Bloomberg reported yesterday that Trump administration is worried China may be reneging on certain trade concessions. The report also said that Chinese negotiators are worried that the US may not remove sanctions even after the deal is struck.
As a result, the risk sentiment soured with Dow Jones Industrial Average falling 26 points. The bid tone around oil also weakened, allowing a fall back to the 50-hour MA support.
However, the highs seen yesterday could again come into play, as trade talks between the US and Chinese teams are set to resume next week, according to an administration official.
Technical Levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
