Brent oil price trading around $70, looks oversold?

Brent oil prices started the week trading slightly higher and rose 34 cents to $69.93 a barrel on London’s ICE Futures exchange. “Crude looks a little oversold and it’s moved pretty quickly, so I think there’s a bit of bottom fishing here,” said Mark Pervan, head commodities strategist at ANZ Global Markets.

The US dollar has also weakened slightly and crude oil is trading close to its 200 day moving average, he said. “You usually tend to get pretty strong support on the 200-day moving average, so you’re maybe seeing some preemptive buying here,” Pervan said.

The stronger US dollar “remained related to European sovereign debt issues, a problem that is unlikely to be resolved quickly,” Jim Ritterbusch, president of trading advisory Ritterbusch and Associates, said in a note.

Bearish fundamentals “will leave open the likelihood of the oil fully participating in any additional dollar strength,” he said.

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