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Brent Crude – Oil remains volatile amid economic uncertainty

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  • Economic fears mounting
  • Concerns of wider conflict in Middle East abating
  • Brent may have entered consolidation

It’s been a volatile week in the oil market, with prices today down around 2% after rebounding a similar amount a day earlier.

The economy remains a downside factor for oil prices, with traders clearly concerned about growth prospects amid high interest rates. Europe is already struggling under the pressure, as the ECB was keen to point out today.

Earnings season isn’t going particularly well and we’re constantly being reminded of the downside economic risks here too.

And then there’s the situation in Gaza and Israel which has previously triggered a surge in oil prices and is now being unwound due to the perception that the risks of a wider conflict are falling.

Consolidation in crude?

From a technical perspective, BCOUSD appears to have entered a consolidation phase with a lot of choppy trading in recent days.

BCOUSD Daily

Source – OANDA on Trading View

That may become clearer over the coming days if it remains above the 55/89-day simple moving average band and the rising trend line, given the recent failure to break new highs.

A move below here may indicate it’s entered a corrective phase, although it may take a move below the October lows just below $84 to back that up.

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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