Brent creeps to top end of range again

This is now the third time that Brent crude has tried to breach the $105.50 level.

The next three days could see less directional influence over the Brent crude from Asia, as China starts a three-day bank holiday to celebrate the Dragon Boat Festival. Without Asia to set sentiment, responsibility now falls with either Europe or the US.

This weekend saw French president Francois Hollande stating that he felt that the eurozone crisis was now over. Certainly the confidence figures that came out of the eurozone in the first quarter suggested that it was making progress; however, the second quarter has failed to maintain that momentum. Without confidence that the eurozone economy is ready to recover, it is difficult to anticipate a catalyst that could push Brent crude through the current glass ceiling.

The more problematic oil-producing regions have had several calm months, passing this stagnation on to the markets. History would dictate that this is unlikely to last for too much longer before perception changes, but for the time being, with a steady supply and no struggling demand, we are not seeing too many factors to boost the price higher.

Brent crude chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.