The lack of US traders did not cool the oil market on Tuesday.
The initial reaction in oil prices to Saudi production expansion and Russian export curbs was positive on Monday, but it was short-lived as prices briefly traded lower. Today, a gain of $1.21 to $71.00 helped the crude bulls, but the failure to break Monday’s high is a red flag.
If you zoom out, it looks like OPEC+ tried to catch a falling knife. So far they have only succeeded in slowing down the fall.
For the bulls to gain any momentum, oil needs to get above $76 and that’s still $5. This week’s EIA data includes the last SPR release of the year, so that’s one headwind out of the way. The 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 its feet on providing stimulus.