The February-March Oil advance from 26.05 to 41.90 inflicted important and consequential damage to the intermediate-term downtrend from the June 2014 high at 107.73 when the price structure thrust above 35.00 on April 4.
Weakness off of the March high successfully tested the April 4 breakout level last week, after which Oil pivoted to the upside from 35.24 to last Friday's (Apr. 8) close at 39.66.
Renewed strength comes amid ongoing debate about still-massive excess supply, still-worrisome over-production, and doubts about the resolve of OPEC and Non-OPEC producers to freeze output at the forthcoming Doha Meeting on April 17.
The promising technical set-up heading into the Doha Meeting—that projects continued strength into the 42-45 next target zone—belies an otherwise bearish underlying fundamental backdrop.
Are we witnessing a classic case of technical price action forecasting a slower, but impending shift in the underlying supply-demand factors for Oil?
Right now, the answer would appear to be yes. Ignore the whisper of the technicals at your own peril.