- Brent’s bounce from recent lows below $64.50 seems to have run out of steam near $66.60.
- The upside is likely being capped by fears of a global economic slowdown.
Brent oil is struggling to rise above $66.60 for the third straight day, possibly due to rising US oil supplies and global economic slowdown.
Prices had dropped 3.2 percent on Feb. 25, confirming a short-term bearish reversal. The bearish move, however, lacked follow-through – black gold picked up a bid at 12-day lows below $64.50 on Feb. 26.
While the bounce saved the day for the bulls, the relief could be short-lived, as the upside is being restricted near $66.60 on fears the global economic slowdown would weaken demand-side pressures.
A Reuters poll showed this week that analysts expect global fuel demand to stutter this year amid a broad economic slowdown.
Further, India, the world’s fastest-growing economy, reported the fourth quarter GDP at 6.6 percent, the lowest in five quarters.
Also, US crude output hit a record of more than 12 million bpd, pushing exports to an unprecedented 3.6 million bpd in February.
Put simply, the oil market could remain amply supplied in the near future. As a result, recent lows below $64.50 could soon come into play.
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