If something can’t go down on bad news..
That’s one of the more common adages in the market and it may well be fitting with what we’re seeing in oil prices at the moment.
Today, oil is up 1.6% as price continues to hold above $100 for the time being.
A record crude reserve release by Biden and talk of more from the IEA has weighed on sentiment but in the bigger picture, we’re still very much caught in the range of $95 to $125 still in oil. What’s looking more bullish for the bulls is that price is even managing to hold above $100.
One argument is that these releases, while impactful, is but a band-aid and not exactly a long-term solution to the structural issues in the oil market. That is something I pointed out here last week.
As much as oil may be “struggling” to scale the highs seen during the peak of the Russia-Ukraine conflict fears, the fact that price is staying up is quite a strong indicator of where sentiment is leaning towards in my view.
We may not get such a straightforward move like the one we saw in early March but on the balance of things, the fundamentals look to dictate that higher oil prices are here to stay barring any major demand destruction globally.