Oil declined after rallying almost 10% over the past two weeks, with technical indicators suggesting recent gains may have been overdone.
(Bloomberg) — Oil declined after rallying almost 10% over the past two weeks, with technical indicators suggesting recent gains may have been overdone.
West Texas Intermediate fell near $87 a barrel after a 2.3% advance last week. Technical gauges including the relative strength index suggest futures remain near overbought territory. Oil has surged by almost $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.
Diesel futures in Europe extended their strong run, however, pushing past $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.
Despite Monday’s retracement in crude, there are still signs of oil market bullishness. Money managers hold the biggest net-long position in WTI for 15 months, while they also added to bets for gains in Brent last week. That came as OPEC+ leaders Saudi Arabia and Russia pledged to extend supply curtailments.
“Producers are keeping it tight in the tug of war over energy prices,” Barclays Plc analyst Amarpreet Singh said in a note. “With Saudi Arabia more aggressive than expected with its unilateral cut and continuing strength in demand, we caution against fading the recent run-up.”
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