Oil settled near year highs after rallying around 10% in recent weeks, with technical indicators suggesting its gains may be overplayed to offset the benefit of risk-on sentiment in broader markets .
West Texas Intermediate fell to near $87 a barrel after advancing 2.3% last week. Oil has risen nearly $20 a barrel since mid-June due to supply curbs from Saudi Arabia and Russia, which have now been extended until the end of the year. Traders are bracing for a possible pullback as technical indicators, including the Relative Strength Index, show futures remain near overbought territory after a renewed rally over the past two weeks and half
Diesel futures in Europe also extended their good run, breaking above $1,000 a tonne for the first time since January. Russia is planning major cuts to its western seaborne fuel exports this month.
Bullish signs have permeated the oil market complex. Money managers maintain the largest net long position in WTI in 15 months, while they also added bets to take gains in Brent last week. This came as OPEC leaders + Saudi Arabia and Russia pledged to extend their supply curbs.
“Producers are keeping it tight in the tug-of-war over energy prices,” Barclays Plc analyst Amarpreet Singh said in a note. “With Saudi Arabia more aggressive than expected with its unilateral cut and continued strength in demand, we caution against fading the recent acceleration.”
Prices:
- WTI for October delivery fell 22 cents to settle at $87.29 a barrel in New York.
- Brent for November settlement was down 1 cent at $90.64 a barrel.
