Oil higher for the third straight day

Oil higher for the third straight day

WTI crude oil is 29-cents higher at $73.90 in the third day of gains today. It's at a two week high and has nicely rebounded from the rout at the start of last week.

But I want to zoom out and highlight the weekly chart. The 50-week moving average is getting set to cross the 200-week MA. It's the first positive crossover since 2018 and is a classic bullish signal.

The drop last week eases overbought conditions and was also a big test for the market. It's now safe to say that it passed.

On the fundamental side, inventories continue to tighten as they're drawn down and we have OPEC certainty through year end. Iran is a risk but the odds of a deal appear to be fading.

On the consumption side, delta is a problem for aviation demand but some of that is balanced by more driving and less public transit usage. Everything in the US highlights gasoline demand at extremely high levels and it's fair to extrapolate that to the rest of the world as vaccination continues.