Certainly, you reap what you sow. In early November, I recommended buying Brent on the breakout of resistance at $41.95 and $ 42.7 per barrel, and this strategy has paid off brilliantly. Thanks to a decrease in political uncertainty in the United States, positive news about trials of vaccines for COVID-19, and the associated hopes for a recovery in global demand, the North Sea variety produced impressive results, reaching the targets indicated in the previous material at $45.8 and $47 per barrel. And it seems that this is not the limit.

Amid reports of 90-95% effectiveness of coronavirus vaccines from three companies at once (Pfizer / BioNTech, Moderna, and AstraZeneca), US stock indices renewed historical peaks, and oil reached its highest levels since March. Then, recall that under the influence of the price war between Saudi Arabia and Russia, and the global recession, black gold collapsed into the abyss, and WTI fell below zero for the first time in history. The hopes of defeating the pandemic in 2021 turned everything upside down: for the first time since the beginning of March, the oil market switched from contango to backwardation on the next futures contract. A bullish environment signals that investors are beginning to worry about a lack of supply, not demand.

Dynamics of the oil market:

The belief in victory over COVID-19 is not the only reason for the growth of the global risk appetite. Donald Trump has ordered his administration to prepare for a transition period, indicating that the 45th US President is beginning to accept his election defeat on November 3. In addition, Joe Biden announced that the next Treasury Secretary will be Janet Yellen. The former head of the Federal Reserve has already made history as the first woman to serve as Chairman of the Central Bank, now she is ready to become the first female head of the Treasury. But this is not the main thing. If Yellen is appointed Finance Minister, the feuds between this Department and the Federal Reserve will surely stop, and emergency lending programs will be resumed, which is perceived with optimism by investors.

The bulls on Brent and WTI are supported by China's intention to overtake the United States in the race of the largest oil refining countries, which allows counting on the continued high demand for black gold from China; an attack by Yemeni Houthi rebels on facilities in Saudi Arabia and expectations for the prolongation of OPEC + agreement on production cuts on current terms after January 1. The meeting of the cartel, Russia, and other participating countries is scheduled for November 30 - December 1, and oil buyers seriously expect that the authoritative organization will continue to support the idea of stabilizing the black gold market in difficult conditions for it.

If we add to this the weakness of the US dollar, the temporary growth of which against the background of strong data on business activity was immediately used for sales, it becomes clear that the rally potential of Brent and WTI is unlimited.

Technically, the North Sea variety, having fulfilled the previously indicated targets at $45.8 and $47 per barrel, intends to restore the upward trend and continue the campaign in the direction of $49.1 and $52.9. It is recommended to buy on pullbacks.

Brent daily chart: