As such, Brent is now stuck within a $59-$63 range, a break out of which may be around the corner. In the days to come, trader attention will be focused on trade developments between the US and China. Yesterday, the US administration official said Trump still wants to meet China’s Xi Jinping in an effort to end the trade war. So, fresh positive news from this front could fuel Brent demand, along with riskier assets in general.
But for the to get out of the current channel, the market needs to see a substantial progress towards a deal. OPEC-led supply cuts and US sanctions against Iran and Venezuela could also help. But even in the case of a breakthrough, the expected surge in US shale output, concerns over economy and a stronger dollar will likely keep the bulls in check.