Oil price is surging as a hedge against USD weakness, despite oil inventories building up.

Chart 1

Chart 2

Chart 3

Despite the rise in U.S. crude inventories, the oil price is now rallying in lieu of it being a hedge against U.S. Dollar weakness.  Thus, monies pouring into oil as a growing expectation that the Federal Reserve will begin to pause interest rates and/or offer guidance to the market that they may cut rates at some point in 2024.  This, by its definition is Central Bank confusion in relation to the energy prices and inflation, that if looked at in an analytical and sensible way, has everything to do with inflation.  If we were facing deflation or a recession, the oil price should be trading below $60 a barrel.  It is not for the sole reason that inflation has imbedded itself via production, transportation and distribution costs.  All being passed onto the consumer at the end of the day.

Chart 1, although a little messy with trade forecast/s and call out notes, shows price supports of 69, 72 and resistance at 78.   As you can see oil has been trading sideways since May 2023 between 69 and 72.

Chart 2 and 3 shows the close up of the oil price heading towards $78 a barrel.