Crude prices continued to recover this morning having fallen sharply over the past fortnight. On Wednesday front-month WTI dropped below $77 per barrel to hit its lowest level in two months. There has been a bounce since then, which has taken WTI back up towards $80. The MACD on the daily chart is starting to turn up, suggesting that upside momentum is building and that oil could push higher from here. But it is too early to know if this could be the start of a significant rally. In fact, prices pulled back from their best levels as Friday’s session progressed. There’s no doubt that the last leg of the sell-off since early April will have driven out many holders of long positions. It will have been a frustrating time for them, having hung on in the expectation that the violence across the Middle East, particularly when it broke out beyond to include Iran directly, and concerns over supply disruptions due to the war in Ukraine, have failed to push prices higher. Instead, it feels as if every bit of news, no matter how insignificant in the grand scheme of things, has conspired to push prices lower, with last week’s unexpected US inventory build being an example. Overall, it has been the outlook for demand growth which has weighed so heavily on oil. The dial-back in US rate cut expectations, and a lack of clarity over the state of the Chinese economy, have driven prices down. The next few weeks may help traders decide if the worst is now over.