WTI down 0.3% to $65.80 levels currently

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From the peak earlier today, oil is down by more than $2 now as price hits a stumbling block as the dollar firms and as overall risk sentiment keeps softer in European trading.

The gap higher was helped by an attack on Saudi terminals over the weekend as buyers also capitalised on the post-OPEC+ momentum. But looking at price action since the turn of the year, have things gone too far, too fast for oil?

WTI crude is up by 36% year-to-date and the latest push earlier today brings it closer to $69 with Brent crossing the $70 mark for the first time since January last year.

There is an undeniable buzz surrounding the oil market at the moment but as with anything in the market, nothing ever moves in a straight line.

WTI D1 08-03

The way buyers have pushed the upside momentum to start the year has already led to analysts revising forecasts higher in the past week. However, the danger in consensus trades is that they are prone to sharp squeezes/corrections from time to time.

I would argue that is likely to be the case for oil moving forward and in considering that, we may be closer to the year's high than we are to the bottom.

The long-term outlook and potential ‘supercycle' dictates that oil still looks attractive structurally, but we may be closer to a bit of breather (for now at least) after having seen price near key levels and with plenty of “facts” laid out on the table already.

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