Oil Gains From Four-Year Low as Technicals Hint Slide Overdone
Oil climbed from the lowest close in four years after a technical measure signaled the recent slump was overdone.
Brent advanced to trade near $61 a barrel after tumbling almost 10% over the past six sessions, and West Texas Intermediate rose to around $58. Both oil benchmarks recently dipped into oversold territory on the nine-day relative strength index. Chinese markets also reopened after a holiday.
Oil declined on Monday after OPEC+ agreed over the weekend to a further supply boost from June, with Saudi Arabia warning of additional hikes if overproducing members don’t fall in line. That’s exacerbated bearish headwinds for futures, which are near a four-year low as trade tensions between the world’s two biggest economies threaten global growth.
US President Donald Trump, meanwhile, said he was willing to lower tariffs on China at some point because the levies are so high that the two countries have essentially stopped doing business with each other. He added that there were no plans to speak with his Chinese counterpart this week.
Brent for July settlement rose 1.5% to $61.16 a barrel at 12:01 p.m. in Singapore. WTI for June delivery was 1.6% higher at $58.02 a barrel.
“Oil is benefiting from a relief rally, possibly with the return of China from holidays and renewed hopes of trade talks,” said Warren Patterson, the head of commodities strategy for ING Groep. “However, risks remain skewed to the downside with lingering demand uncertainty and a shift in OPEC+ policy.”
There’s been tentative signs of weakness in the Middle Eastern crude market, with several price gauges easing in recent sessions. The premium of Oman and Murban grades over the regional Dubai benchmark has narrowed.
Source : Bloomberg
