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.

brent crude oil daily

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.