Summary:

• Brent Oil surges higher to reach 3-year peak
• Price breaks above 2015 high to trade close to $70
• Weekly RSI of 79 the highest in five years

Following a rare lower close on Wednesday – despite yet another drawdown in the DOE report – Oil bears may have thought the time had come to call a top in the market. However, today’s trade has seen another surge higher with price not only taking out the weekly high of 69.36 but also breaking above the May 2015 peak of 69.61. 

 The surge in Brent oil has continued today with price moving higher once more. Source: xStation

In fact you have to go all the way back to December 2014 to find a higher price and if the daily candle can end above here then there’s little by the way of swing resistance overhead for quite a distance. Having said that, there remains reasons why longs should be cautious to buy at these levels with the current extreme level of speculative positioning chief amongst them. In addition, the weekly RSI has risen to around 80 following the latest gains and this signals the highest level of overbought conditions in several years.  

 Brent Oil has moved above the May 2015 high of 69.61 to trade at a new 3-year high. Source: xStation

 The market has an RSI reading above 79 on a weekly timeframe – the highest in at least 5 years. Source: xStation