It's been a one-way trade in oil since the spike down to $66 in early December but we're now testing a big resistance level.
Brent touched $86.71 today, which is a cent higher than the October high of $86.70, but we'll call it even since it's now back to $86.58. What's more is that the 2018 high of $86.74, which is also right there.
If it breaks, we will be at the highest since late 2014 and with very little resistance standing in the way of $100, if not $115 in brent.
What might constrain crude in the near term is overbought conditions. Brent is up $20 in six weeks, which is one of the largest, fastest moves in oil on record. That's left it in oversold territory.
I also have to believe that omicron is hitting the physical market. Flying is way down and driving is taking a hit. That hasn't shown up in price but there have been back-to-back huge builds in US gasoline inventories.
I wonder if that gap is being filled by gas-to-oil switching for power in Europe and Asia but I'm skeptical about physical demand here. That skepticism would turn to outright bearishness if Chinese lockdowns grow more widespread.