Why is oil trading near a 6-month high—breaking into a new range—and rallying above $56 a barrel, when oil supplies are at the highest level we've seen since 1990 and demand is tanking?
Oil remains technically strong today, despite rather bearish fundamentals, as traders continue to follow the equities market. Crude's broken into a new range and a settlement above $55 is significant.
What's fueling the momentum? Nymex traders tell me they're seeing new money coming in from passive funds that are reallocating assets away from precious metals and into energy holdings. It's this money flow—rather than the fundamental supply/demand data—that's driving oil prices higher.