It was looking bleak for the oil bulls earlier today as crude prices fell $2 on worries about the Chinese economy. But the buyers put on a tour de force in New York trading, taking WTI to $83.03 from $79.90.
This kind of turnaround on a day with a poor risk backdrop is a sign of independent strength in oil and a tight market.
My only worry is that API data leaked early and this trade is a front-run of the data, which will be out at 4:30 pm ET, followed by the weekly EIA data tomorrow.
If oil can sustain strength through those numbers, it has a good chance of breaking the year-to-date highs set in April.