OPEC+, especially Saudi Arabia, has resorted to announcing production cuts and significantly underdelivering on those giving the market short-term upside surprises to counteract increased US production and a slowing global economy and lower demand projections. This rally since end of December can be characterized as a string of short-term bumps related to the surprises which will eventually run into oversupply/underdemand issues in the future.
A prospective US stock market downtrend will provide downside pressure in CL over the next few weeks/months as the product finally tops out. I'm not sure how much more output cut panicky OPEC+ and especially Saudi Arabia can afford with their large deficit. They seem to be panic-cutting for the very reasons I have stated that a longer-term downtrend is around the corner.
I wouldn't be surprised if the contract has also been supported by the CERAWeek convention in Houston this week which has boosted XLE, XOP, and OIH. But this short-term support will alleviate by end-of-week.
I also wouldn't be surprised if the late-day buying today was hedge funds and other speculators buying in very late into the rally as I have seen them enter the market later in the day at unpropitious longer term prices a few times this year. But this doesn't mean that the short-term upside momentum won't continue a bit longer...
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