• Economic fears mounting
• Concerns of wider conflict in Middle East abating
• Brent may have entered consolidation

It’s been a volatile week in the oil market, with prices today down around 2% after rebounding a similar amount a day earlier.

The economy remains a downside factor for oil prices, with traders clearly concerned about growth prospects amid high interest rates. Europe is already struggling under the pressure, as the ECB was keen to point out today.

Earnings season isn’t going particularly well and we’re constantly being reminded of the downside economic risks here too.

And then there’s the situation in Gaza and Israel which has previously triggered a surge in oil prices and is now being unwound due to the perception that the risks of a wider conflict are falling.

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Consolidation in crude?

From a technical perspective, BCOUSD appears to have entered a consolidation phase with a lot of choppy trading in recent days.

BCOUSD Daily

Source – OANDA on Trading View

That may become clearer over the coming days if it remains above the 55/89-day simple moving average band and the rising trend line, given the recent failure to break new highs.

A move below here may indicate it’s entered a corrective phase, although it may take a move below the October lows just below $84 to back that up.

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