Brent crude maintains its bounce

Traders continue to squeeze the Brent crude oil price higher, after testing the $103 level less than a week ago.

The four-day rally in Brent crude has seen over $3.50 added to the price, as the market has balanced out the oversold sentiment. No doubt the US oil inventories figures due later this week will be playing on the minds of traders as they react to recent events.

2013 has been a rocky road for the crude price. At present it is down 4.25%, having experienced a $22.41 range between its $119.16 high in February and $96.75 low in April. This volatility has mostly been triggered by some extraordinary influences this year, such as the very real chance of military action in Syria. However, the Brent crude market has been less affected by the changing economic health of the EU, UK and US.

In order for oil to head higher, the fragile recovery in the EU will need to solidify. And the wobble we have seen highlighted by the ECB’s decision to cut interest rates last week will need to be just a blip in that recovery. At present, the question of what stage the various economic regions have reached in the recovery process is still a matter of differing interpretation and opinions.

Daily Brent crude chart

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.