Markets might have realised that last year’s sharp correction was a bit of an overreaction. Worries over slowdown in global demand could have been exaggerated while tightening supply has become a reality. The OPEC+ club has pledged to maintain the course of production reduction, and the US has escalated its sanctions against Iran and Venezuela by placing further restrictions on their oil dealings.
On the technical side, the Brent crude has risen above the resistance of 68.5. Bulls could push the price towards the psychological level of 70. On the downside, 66.5 is a key support in the medium term.
The sentiment-price correlation chart shows the sentiment climbing to a new high. Daily news sentiment is moving higher and in 60% of the last 10 occurrences price has risen within 9 days.