Crude oil prices have been trading in a muted manner these days, following an aggressive sell-off last week. Brent continues receive support around the $64 handle on Friday, targeting the $65 figure which capped bullish attempts yesterday. The market has already digested the EIA report revealed earlier this week. As a reminder, the data pointed to a massive increase in gasoline and distillate inventories while shale oil production rose to another record high of 13 million barrels per day.
Then, traders focused back on the US-China trade relations. Interestingly, the market saw a rather muted reaction to the signing of a phase one trade deal, as concerns over the remaining issues remained. Besides, dollar demand picked up after upbeat US economic data, which limited the upside potential in prices as well. Anyway, the futures managed to register a marginal growth on Thursday despite the prices were off daily highs by the end of the day. Today, Brent crude sees a muted upside bias, and the general dynamics looks unsustainable. By the way, in the weekly charts, the prices remain slightly negative.
Mostly positive economic updates out of China revealed earlier today also failed to impress oil bulls. Such an apathetic behavior and unwillingness to buy futures suggests investors may push Brent lower from the current levels in order to reenter the market once some positive drivers emerge.
In the short-term, the risk event for the oil market is the upcoming series of economic updates out of the Unites States, including building permits, housing starts, industrial production, and consumer confidence. Should the figures surprise to the upside like retail sales yesterday, the greenback will receive another bullish boost. In this scenario, Brent will likely retreat and turn red in the daily timeframes before the end of the day and the trading week. Also, traders will focus on Baker Hughes data. However, market reaction to this release has been fairly muted of late, so the dollar factor and risk sentiment in general will serve as the main drivers for energy markets.