Risk appetite fuels oil market rally

OANDA:BCOUSD   Brent Crude Oil
Brent extends its rally on Thursday, refreshing nearly three-month highs around $64.80. The prices keep rising for a third day in a row, lifted by positive risk sentiment, OPEC efforts and geopolitics. The next upside target for Brent comes at $65.

Investors continue to expect a progress in US-China trade talks that will ultimately could lead to a deal. Trump’s positive comments on this front provide support to riskier assets including oil . In the next two days, traders will assess the statements from Beijing, and evidence of progress could lift the barrel even higher until the end of the week.

Another source of bullishness for the crude oil market is the recent statement by Saudi Arabia oil minister, who said the country will cut crude exports and deliver an even deeper cut to its output. Naturally, traders are cheering any signs of a more significant supply cuts than expected, especially as the market continues to worry about outlook for global demand.

In the near term, the factors that may fuel profit-taking at attractive levels include lack of progress in trade talks and souring risk sentiment. In a wider picture, the bullish potential in the market will likely further be capped by concerns over global growth.