Oil has had a solid run of gains in the past few weeks and in the early stages of this week, it looked immune to the deteriorating risk sentiment in equities. But we’re starting to see some catch up now and you can pin it to numerous factors i.e. geopolitical risks receding, technical exhaustion, or just purely a knock to risk sentiment.
The fact of the matter is oil may be appearing to fail at the final hurdle in establishing the next leg higher.
WTI crude is down 2% again today to $83.80 and that pales in comparison to the highs earlier in the week @ $87.91. The chart signifies how the weekly close looks set to fall short of breaching the key $85 level:
At the same time, Brent is also still hoping to secure a breakout but may be falling short on that front as well after price has retreated from the highs near $89 to below $87 at the moment:
I’ve been highlighting the nuances of this potential oil breakout and the risks associated all through the week: