Disappointing finish as WTI settles below $70

WTI crude settled up $1.80 to $69.95 but well below the $72.91 high. The selling has continued after settlement down to $69.48.

Disappointing finish as WTI settles below $70

Right as the initial reports about the new variant began to spread, I highlighted that oil was one of the cleanest ways to trade covid. I still think that's the case but in the short-term is going to be heavily clouded.

The market is still digesting the SPR barrels and is also trying to factor in Iran and this week's OPEC meeting along with omicron. That's too many risks to pin down at once and the inclination is to head to the sidelines instead.

We see that in the price action today. I'm also reminded that all the dip buyers on the SPR release were cleaned out. That was a fast money trade and an even faster exit. I imagine stronger hands will wade in eventually but not until there's some clarity on Iran and OPEC.

Ultimately, I think the dip will be bought but today's price action shows that there's no rush.