Brent Crude: Oil Looking a Little Tired as Gas Prices Pare Gains
2023.08.14 04:39
- Brent losing momentum near $90
- Gas prices ease after Wednesday’s surge
- Divergence a technical red flag
prices have risen more than 20% since late June, buoyed by the actions of OPEC+ and the unilateral additional cuts by Saudi Arabia and Russia, both of which have been extended to September.
Furthermore, the economic outlook has become less bleak as countries have been seen to be making progress on inflation, allowing for the end – or near-end – of tightening. While those things may change over the coming months, there’s clearly more optimism now.
That said, we are seeing some signs of momentum wearing thin as Brent approaches $90 and trades around its 2023 highs.
prices have been extremely lively this week, which has been put down to a couple of factors, most notably the risk of strike action at an LNG facility in Australia.
The moves highlight how sensitive the market remains right now, with the 40% spike in European gas futures on Wednesday huge under the circumstances. It’s held onto the bulk of these gains, and so in the near-term, trading conditions could remain very volatile.
Divergence signals exhaustion
As we can see from the chart, while prices have continued to rise, the stochastic and MACD have not. This kind of divergence signals weakness in the trend, a sign of exhaustion.
It’s not necessarily a bearish signal on its own but it could be viewed as a red flag, especially on approach to a key resistance zone like the 2023 highs its currently trading at.
Daily
Source – OANDA on Trading View
Original Post
