The lack of US traders didn’t cool the oil market on Tuesday.
The initial reaction to oil prices to the Saudi output cut extension and Russian export curbs was positive on Monday but it didn’t last long as prices briefly traded lower. Today, the $1.21 gain to $71.00 helped the crude bulls but the failure to get over Monday’s high is a warning sign.
If you zoom out, it looks like OPEC+ has tried to catch a falling knife. So far, all they’ve managed to do is slow the fall.
For the bulls to get any kind of momentum, oil needs to get above $76 and that’s still $5 away. This week’s EIA data features what will be the final SPR release of the year so that’s one headwind out of the way. Specs are also heavily negative on oil, which should add fuel if it ever turns.
But it’s hard to be overly bearish without a real catalyst and China is dragging on delivering stimulus.