The oil prices have kept improving step-by-step in the second half of the week. The Brent quotes have not only checked the $65 handle but even managed to hit it reaching some $65.14/bbl. As a result, the oil market posts quite positive week especially taking into account insufficient luck for an upward break observed lately.
The market will become able to realize the stability of the current upward impulse after the weekend as the global markets will start reflecting the results of the trade talks as well as the future of the US government. For reference, US President Donald Trump probably intends to approve the agreement with Congress.
Once investors assess the talks and take decisions the market outlook will depend on the sanctions against Iran and Venezuela, perspectives of global supply increase, global demand outlook as well as the state of world economy, in particular, a Chinese one. An additional factor that may have influence will be the actions of the OPEC members. As a result, it is clear that the prices can face pressure from different fronts in the near term, so the market will stay highly volatile.
With a threat of global demand slowdown, the chance that OPEC oil may enjoy weaker demand in 2019 is getting stronger. Thus, the cartel will have to consider extending the production restriction agreement.
Speaking about the short term, persisting optimism may assist Brent prices in taking roots above the $65/bbl handle. However, this scenario can be confirmed only after the break of the 65.50 handle.