Crude oil prices have broken fresh four-month highs on Thursday, with Brent touched a $68.44 figure and started to retreat, clinging to the $68 figure. The general picture in the market remains bullish as the prices have been rallying for a third week in a row.
The latest ascent in Brent was due to a widespread dollar weakness on the aftermath of the Federal Reserve meeting as the US central bank’s tone was even more dovish than expected. However, the greenback seems to have digested the message and is now making recovery attempts, which caps the upside momentum in the oil market in the short term.
Despite the prevailing positive tone, oil traders remain nervous amid conflicting reports on US-China trade relations. There earlier news that China was resisting U.S. demands was interpreted as an obstacle on the way to striking a trade deal between the two world’s largest economies.
Technically, Brent needs to defend the $68 figure in order not to attract a more aggressive profit taking towards the end of the trading week. A break above $70 looks unlikely at this stage due to the remaining investor uncertainty over the US-China trade talks and the outlook for the global economy.