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Brent attempts technical rebound

The global oil benchmark is endeavoring to pick itself off a 15-month low and trim its largest weekly drop so far in 2023.

The outlook for short-term demand has been hit by contagion fears following the Silicon Valley Bank and Credit Suisse banking crises as risk-off appetite and dollar volatility roiled markets.

The International Energy Agency’s recent report also did little favour for oil bulls, as the IEA warned in its monthly report that higher-than-expected Russia exports will keep the market in surplus for the first half of the year.

Brent attempts technical rebound

Traders got their cues to embark on a technical rebound after Brent’s 14-day relative strength index fell below the 30 threshold that marks “oversold” conditions.

However, risk-taking appetite must remain intact to sustain this technical rebound into next week.

If the Fed can successfully swat away contagion fears next week, that may help restore Brent closer to the psychologically-important $80/bbl level.

Still, a ramp-up in contagion fears that drags oil prices even lower may prompt OPEC+ into action with supply interventions that should help shore up prices.



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