After a brief dip to the $66.60 area, Brent trimmed losses and recovered to the $68 figure yesterday. On Thursday, the prices are clinging to this level but lack the impetus to stage a more sustainable rebound amid the ongoing trade war between the US and China, the two largest consumers of oil.
The latest API report brought some relief to investors as the data showed US crude inventories fell by 5.3 million barrels in the week to May 24 to 474.4 million barrels, which was a much larger drop than the 900,000-barrel fall expected. The official data from the Energy Information Administration due later today.
Brent also remains afloat as traders expect that OPEC+ group will extend production cuts, while the US sanctions against Iran and Venezuela add to supply concerns. All of this helps to partly offset the worries about the potential consequences from the US-China trade dispute. Technically, Brent now looks neutral in the daily charts, with the $68 level in focus. The barrel needs to confirm a break above this barrier in order to target the $70 threshold again.