The oil market last week ended on a technical cliffhanger with crude flirting with the 200-day moving average. Then at the open today, it backed off, falling 50 cents in early trading in what looked like a rejection.
The mood has shifted though despite weak PMIs globally and WTI crude is now up $1.21 to $78.27, which is the highest since April and marks the first rise above the 200-day moving average since August.
WTI crude daily with the 200dma
I’ve highlighted the crowded short positioning in oil, which earlier this month was the most-negative since 2020. The rally from the bottom looked like a short squeeze and the rise above the 200-dma will surely add to that momentum. If we get a close her today, it shouldn’t take too much to get crude to the April high of $83.73 but watch out for headlines around whether Saudi Arabia will extend its voluntary oil cut into September.