Bears Stop Oil Prices Longest Winning Streak Since Early 2019

Crude oil priced bulled back some of its gains at the mid-week trading session. Oil bulls seem to be having a well-deserved rest after the black liquid hydrocarbon had its longest run of upsides in two years as another key macro revealed another decline in oil inventories at the world’s largest economy.
Oil prices have surged by 12% over the past seven trading sessions, thereby printing its longest winning streak since early 2019.

A recent report from the American Petroleum Institute revealed the world’s largest producer’s stockpiles reduced by 3.5 million barrels in the previous week.
However, amid such positivity presently in play at the world’s energy market, oil traders are becoming cautious as recent price actions reveal the black viscous fossil is heading towards an overbought position.

Such further triggers oil traders to pull some of their gains around the $61 a barrel price level, coupled with a significant number of energy experts warning such rally could weaken the compliance efforts kept in place to support oil prices as reports reveal some countries might consider pumping more crude on the bias energy demand has improved.

Although it’s fair to say that since recent data reports reveal as energy demand picks up, coupled with OPEC+ urge in keeping an unusually high production capacity from distorting energy demand/supply rebalancing, it might be a matter of weeks before oil prices breach the $65 a barrel price level.

That being said, As Brent crude prices trade above $60 per barrel, there is little reason to doubt that demand fundamentals will justify further recovery in oil prices to long term equilibrium of $65/barrel and likely beyond by year-end as we are just starting to rev up the reflation trade engines.