The easy headline to point to is the focus on Iran nuclear talks but the underlying backdrop is that oil has gained for seven consecutive weeks now. From a technical standpoint, that might call for a bit of retracement in itself – especially when you consider that WTI crude has gained by more than 30% during that run.
There’s plenty of talk about the oil market still being tight and Goldman Sachs was out with another note on that yesterday here.
That continues to fuel prospects of oil heading towards $100 but just be reminded that in markets, nothing ever moves in a straight line. Perhaps that could be a caveat to take note of for oil this week.
I’m still holding a bullish view on oil from a structural standpoint but that doesn’t mean to be ignorant of the risks of a pullback, especially after the run of gains outlined above.
Any major dip is one that I’d look to scale more long positions into but we’ll see how market sentiment plays out this week to be sure. If anything else, also keep an eye on the near-term chart with the key hourly moving averages seen @ $90.09 and $88.83 currently. Those will be good levels to gauge short-term sentiment in oil and the scope of any pullback.