Oil prices retreated from earlier gains, as negative sentiment in broader financial markets offset support from technical buying. Brent rose above $69 per barrel, posting its fourth gain in five days. The dollar posted its biggest gain since July, weighing on commodities priced in that currency, while global bonds experienced significant declines.

Trend-following Commodity Trading Advisors have been consistently buying crude oil over the past few weeks, helping push prices higher, according to Nicky Ferguson, head of analytics at Energy Aspects Ltd. Their buying is likely to continue for several more days, he said. Speculators also have the fewest bullish bets on US crude futures in nearly two decades, giving prices room to rise.

OPEC+ will meet later this week to decide on October production. Most market observers expect the group to opt to keep supply steady.

Russian flows are also in focus amid US efforts to pressure Moscow to make peace in Ukraine by targeting India, a major importer of its crude oil. Treasury Secretary Scott Bessent said Washington will consider sanctions against Russia this week.

Global benchmark Brent crude has largely held between $65 and $70 per barrel in recent weeks, with prices about 8% lower this year. There are widespread concerns about a looming surplus after OPEC+ voted at its previous meeting to ease supply curbs in an effort to regain market share, and as the US-led trade war risks hampering energy demand.

However, in the short term, US stockpiles remain low at the key storage hub of Cushing, Oklahoma, and there are new geopolitical risks from the war in Ukraine to the US deploying naval forces off the coast of Venezuela. "Sentiment in the oil market has shifted from very negative to more neutral," said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. "The main support for oil prices is the geopolitical premium. No one believes anymore that a peace deal between Russia and Ukraine will be reached soon." (alg)

Source: Bloomberg