Oil is on fire.
There were positive murmurs from Iran nuclear negotiations today and the oil market also had to deal with the headwinds from risk aversion yesterday. Saudi Arabia also cut prices to Asia to a three-month low.
Yet none of that has derailed uptrend. WTI crude is up $14 from the December 20 low, including $2.24 today to $80.12.
Some are watching Kazakhstan and the potential for supply disruptions there. Libya also continues to have supply offline.
On the funds flow side, there's been incredible strength in oil companies to start the year as the broader market clues into the underinvestment in production and the high cashflow generation above $70.
I'm a big oil bull but this all seems a bit overdone given the risks around omicron demand waning, particularly in China where lockdowns are a growing risk.
As for the chart, there isn't much standing in the way of a retest of $85 now.
