WTI breaks the weekly high in 2.2% rally
Oil hits the highest since May 2
Oil is going with the ebb and flow of the risk trade this week but that raises some important points.
The first one is that even as equities sank early in the week, oil held $60 -- and without even a real test. That should have been the first clue for the bulls.
Now that stocks have had a modest bounce we see crude prices break above the highs of the week and to the best levels since the first hours of the month. We're still $3 from the April high but crude is showing some positive signs and that plays back into the negative momentum in USD/CAD.
Ultimately, there are some major geopolitical risks in play with Iran, Venezuela and the trade war. At the same time, there is less of a risk that OPEC will turn on the taps. On the flipside, the Chinese-US trade war isn't going away and it will be hard for oil to climb much further if global growth is kneecapped by the trade war.