There is finally bullish news. WTI crude prices are back near $82. While strategists at TD Securities believe the risks have tilted to the upside, it is too early to take aggressive strategic longs.

Stars aligning for oil bulls

“If OPEC+ cuts the rumored one million bbl/s of production starting in November and Washington starts refilling the SPR, then this market could well move into a material deficit. This likely means that money managers could continue covering shorts and start taking out some limited longs in the not too distant future, implying a rally which could easily see a move back toward $90/b resistance.”

“Given that there is the possibility of a deep recession resulting from restrictive action by key central banks and continued uncertainty surrounding when China returns to normality, after COVID shutdowns, we don’t see a sustained rally.”