Oil is having a look at the December highs

There’s a strong seasonal tailwind for oil starting in mid-January and running for a few months but the first big hurdle will be rebounding from the omicron swoon.

WTI has struggled to recoup the 50% retracement level at $73.72. It rose as high as $73.33 today in a one-cent rise above the prior December high. It’s failed to continue pushing though and retraced to $72.86.

Naturally, the market will quiet from here due to the holidays but oil demand isn’t slowing down. The worry for me continues to be omicron and the risk of lockdowns in China.

I think the technicals will tell that story in the oil market $72.50 is a good level to manage risk around.