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Benchmark crude oil prices will likely extend their losses this week as investors questioned whether the recent rally which sent Brent crude to a multi-year high is warranted by the fundamentals, CNBC's weekly survey showed.
Sandy Jadeja, Chief Technical Analyst at City Index said the weekly chart for U.S. crude futures has created a potential reversal signal. "A break below $105.70 "would suggest a pullback towards the $100 level may be on the cards," Jadeja said. "Nymex will need to clear $110.30 to negate the bearish view and reach for $115 - $117."
Ten out of 14 respondents expect prices to fall this week while the remaining four expect prices to rise. Balance of opinion in last week's survey called for prices to rise but the bulls were wrong-footed by the pullback in Brent , which fell 2 percent for the week after five straight weekly gains, while its U.S. counterpart fell 2.8 percent, snapping a string of three higher weekly finishes.
"Fear and speculation" drove the gains in Brent crude last week to its highest level since July 2008, said Jonathan Barratt, CEO, of commodities newsletter Barratt's Bulletin. "We see the Middle Eastern premium being built in plus speculators looking to actually take advantage of it." Barratt told CNBC Asia last week. Though U.S. crude inventories continue to build "we're not seeing that flowing through in terms of fundamentals really pushing the price," he explained.
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