U.S. West Texas Intermediate crude oil futures spiked to their highest level since late 2014 early this week before backing away on profit-taking. The long-term fundamentals are painting a bullish picture of the market, but concerns over short-term valuations may be encouraging speculators to book profits while they position themselves ahead of further confirmation of the bullish outlook.
The week started with some light speculative buying on Monday. Some of the buying was tied to the upside technical momentum related to the previous week’s strong surge. Some of it to speculation that last weekend’s U.S.-led bombing of Syria would lead to a further escalation of U.S. involvement in the area or a possible conflict with Russia.
Prices sold off sharply on Monday as the military activity in Syria turned out to be a one-time event. The fact that there wasn’t any retaliation from Syrian allies Russia and Iraq also contributed to the weakness.
After a slight follow-through to the downside on Tuesday, crude oil prices mounted a stronger rebound following the release of a bullish inventories report from the American Petroleum Institute.
WTI crude oil recovered all of its earlier loss for the week and spiked even higher on Wednesday, hitting its highest level since late 2014 after a U.S. government report showed U.S. crude stockpiles declined last week and as traders continued to price in the possibility of supply disruptions in several key…