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.
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.