At last there is bullish news. WTI crude prices have returned to close to $82. Although TD Securities strategists believe that risks have tilted to the upside, too early to take aggressive bullish strategic positions.

The stars align for oil bulls

“If OPEC+ cuts the rumored million bbl/s of production as of November and Washington begins to fill in the SPR, then this market could well go into a material deficit. This means that money managers could continue to cover short positions and start taking out some limited long positions in the not-too-distant future, which would imply a recovery that could easily return to the resistance of $90/barrel“.

“Since there is possibility of a deep recession as a consequence of the restrictive measures of the main central banks and the uncertainty about when China will return to normality, after the closures due to COVID, we do not see a sustained recovery.”