Brent Crude – Oil looking a little tired as gas prices pare gains – MarketPulse

• Brent losing momentum near $90
• Gas prices ease after Wednesday’s surge
• Divergence a technical red flag

Oil 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 waring thin as Brent approaches $90 and trades around its 2023 highs.

Natural gas 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.

[embedded content]

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.

BCOUSD Daily

Source – OANDA on Trading View

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.