After a brief dip below the $70 handle, the recovered above $71 but failed to challenge the $72 barrier and turned lower on Tuesday. On the one hand, buyers’ enthusiasm was dampened by Trump’s threats, fueling concerns over oil demand in China. On the other hand, the market is still supported by expectations of a decline in global supplies due to US sanctions against Iran and Venezuela.
Technically, Brent needs to hold above the 200-DMA that lies marginally above the $69 handle. Otherwise, the short-term outlook will deteriorate. On the upside, prices need to regain the $71 level at least but it could be difficult should US-China tensions continue to rise.