Following last Monday's major gap down, you would think the market learned from paying too much attention to geopolitical risks. But as the dust settled, it became increasingly clear that Iran will retaliate, and here we are again, WTI is filling the gap, and prices are back to where we finished two weeks ago.
My advice is to ignore the geopolitics and focus on the fundamentals. If you watched the physical market reaction last week following the gap down, you would have noticed that the key indicators weren't following the bearish financial flows.
Source: HFIR
And fast forwarding to today, the physical market signals we follow closely are all showing healing signs indicating that there's more upside from today.
Brent 1-2
3-2-1 Crack
As we wrote last Wednesday following the bullish EIA oil storage report, "US Oil Data Is A Lot Better Than You Think, " global oil data has also trended positively.
Global Onshore Crude