Support crumbles under Brent crude

Easing manufacturing figures in Europe have seen crude edge lower as demand cools.

For a number of months the economic picture coming out of the EU has become increasingly poorer. In Germany, as volume of products has diminished but quality has increased, the underlying demand for crude has eased as has the price. Although we are of heading towards the colder part of the European year, last month’s mild temperatures did not compensate as demand did not rise.

A look at the chart also raises some questions as to how much support from the trading community the price has. Over the last year the $106 level has proven to be a bit of a psychological one, and the recent break below it could well trigger some fresh selling. 

Daily 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.