Oil markets remains delicately poised – London Business News | Londonlovesbusiness.com

Taking a short-term view, the oil market feels delicately poised and what happens over the next 24-48 hours could be very telling for the near-term passage of play.

After a near 14% rally from the 4 June lows, which took price through the May range highs of $80.62, and after a huge bullish position adjustment in both Brent and WTI futures, we’ve seen price pull back to test this former breakout point – if crude now kicks higher, confirming the bulls are happy to support, it would suggest the bulls have a platform to take this back above $82.41 (20 June high) for a possible trend higher, where pullbacks should be shallow and a move into $86.00/20 would be our targeted play.

Conversely, a failure to hold $80.62 would suggest a change in the market structure and alter the skew in the distribution to one where we see higher probabilities of a move back towards $78.50, even $76.00.