Oil bulls momentarily kept their bandwagon moving, in spite of oil glut risk as oil traders monitor the progress of talks to revive a 2015 Iranian nuclear deal that at one point might likely flood the fragile market with Iranian oil supplies.
At the time of writing this report, the British based oil contract, Brent crude prices were up by nearly 0.7% to trade near $67 a barrel as the contract rolled over to the August 21 contract on Sunday, also the West Texas Intermediate futures also posted similar gains to trade at $64 a barrel.
Oil bears went on a rampage last week after Iranian President Hassan Rouhani revealed the world’s most powerful economy was “ready” to lift sanctions on the country’s black fossil supplies, triggering a spiral fall on the energy derivative prices in the latter part of last week with rising COVID-19 caseloads in India, oil traders seem to cast their bullish bets over positive economic macros coming from China and the United States.
Consequently, candlestick patterns reveal oil bulls will need more than strong macros from these two major economies sessions with recent candlestick formations showing some form of exhaustion as it approaches $67 a barrel, accompanied by overbought signals with the Exponential Moving Average 50 forming a negative pressure against the prices of Brent crude.
Still, market commentators remain bullish on the average, as it rallied this year on the successful roll-out of COVID-19 vaccines coupled with improved social mobility around the globe.
Athough such upsides seem to be capped since late Q1, with fresh waves of viral infections rolling out in some key energy markets as the oil cartel gradually loosens its grip on tightened oil supplies, thereby increasing the odds for oil prices staying below $75 a barrel in the first half of 2021.
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This article was originally posted on FX Empire