Traders concerned about G20 meeting?
The oil price rebound may have already run into a little snag, with Brent running into some resistance around $64.50 on Monday.
The rebound in recent sessions had been attributed to the US/Mexico deal on the border to avoid tariffs, improved overall sentiment and suggestions from Saudi Arabia that an extension was effectively guaranteed.
The latest stumble may prove to just be some early profit taking but there is a feeling that there’s more to it. There still appears to be little idea of how much Russian involvement there’ll be in an extension and with the date of the OPEC+ meeting now looking like early July, perhaps producers are looking to make a decision with one eye on the outcome of the Trump/Xi meeting.
Brent Daily Chart
The charts potentially support this uncertain and cagey approach, with price having fallen more than 15% in just a week between late May and early June. The recovery seen since has hardly been significant before running into resistance around $64.50, which may suggest traders are nervous about two events later this month/early next – the G20 at which Trump and Xi will discuss the breakdown in trade talks and the OPEC+ meeting.
That’s not to say we won’t climb higher here and a break above this week’s high could bring $67-68 into focus, with it being prior support and resistance. But without firm suggestions that a US/China deal or a significant cut extension is secured, I struggle to see oil traders getting too excited.
Brent 4-Hour Chart
Should we head lower then the area around $60 will be interesting, with it having run into support around here on numerous occasions since late December. Brent has struggled to hold below $63 so far though so perhaps if this can hold, it will be the trigger for another test of the lows.
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