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.