Oil has pretty much put behind the omicron drop to start the new year and the break above $80 yesterday is another good sign of the recent bullish momentum for the commodity.
Price is looking perky once again today, with the high touching $81.99 before easing back to around $81.50 currently.
The next step will depend on the US CPI report later today but if price can keep above $80, I would argue there is good potential for oil to start chasing the October and November highs from last year around $85. This is all from a technical point of view of course.
The fundamental outlook is a little bit more cloudy though. While there is much optimism on the omicron front in major Western countries, China remains a curveball and the biggest risk factor.
Broader markets are less concerned about China for now but it is worth keeping an eye out for in case anything does pierce the armor.
If things keep as they are, oil is headed for a fourth straight weekly gain. That is rather encouraging but it could also point to signs of being overbought, so that could make resistance closer to $85 harder to get by.
But baby steps, first there is the US CPI report later today to deal with.
