USOI - Oil: The Top Is Likely In For Now
2024-04-11 04:12:00 ET
Summary
- Elevated positioning, bullish sentiment and falling refinery margins continue to suggest this move higher in oil prices is probably done.
- However, prices should be well-supported on the downside, with OPEC+ supply greater than consensus believes and a pick-up in global growth underway.
- As such, we are likely to see a range bound market for the foreseeable future, one that is well-supported on the downside but capped on the upside. We may well be at the top of that range right now.
Don’t expect much upside in oil prices from here
Back in March, I penned an article opining why oil prices are probably at or near a local high. WTI was around $82 at the time, and has since moved marginally higher to the $85 level we sit at today (down from a high of $87 last week). At the time, my argument was based on a number of fundamental and positioning indicators which were suggesting oil prices would struggle to move meaningfully higher. I was never expecting an imminent correction (nor am I at presently), but instead continue to hold the opinion oil prices are probably at the top of their range for the time being....
Oil: The Top Is Likely In For Now