Oil holds at yearly highs as technical levels give traders pause
BNN Bloomberg
Oil steadied near its highs of the year after rallying about 10 per cent in recent weeks, with technical indicators that suggest its gains may be overdone sapping the benefit of risk-on sentiment in broader markets.
West Texas Intermediate edged lower to settle near US$87 a barrel after a 2.3 per cent advance last week. Oil has surged by almost US$20 a barrel since mid-June on supply curbs from Saudi Arabia and Russia, which have now been extended through the end of the year. Traders are bracing for a potential pullback as technical gauges, including the relative strength index, show futures remain near overbought territory after a renewed surge over the past two and a half weeks.
Diesel futures in Europe also extended their strong run, pushing past US$1,000 a ton for the first time since January. Russia is planning large cuts to its western seaborne exports of the fuel this month.
