After months of sliding prices and bearish charts, oil just pulled a fast one. The United States Oil Fund USO is up over 7% in the last five days – its best weekly move in months – raising the inevitable question: is the bottom finally in?
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Technically speaking, the oil proxy, USO ETF still has a lot to prove. It’s trading below its 20, 50, and 200-day simple moving averages (SMAs), flashing a bearish trend. On the yearly chart, the price is right below the 200-day SMA. If buying pressure and bullish momentum continues, we could see a major breakthrough above its long-term resistance.
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That said, fundamentals are starting to shift – and smart money is sniffing opportunity. Energy investor Josh Young says we’re seeing the “highest level of smart money buying oil since 2020.”
And as Against All Odds Research bluntly put it: “Crude oil looks dead to most people. But commercials—the pros who live in this market—are quietly buying.”
What’s driving the shift? Geopolitics and OPEC. U.S. sanctions on Chinese buyers of Iranian oil have added pressure to global supply, and deeper cuts from Iraq and Kazakhstan are tightening things further. Meanwhile, falling gasoline and distillate inventories suggest demand is still firm, despite a surprise crude stockpile build.
Sure, demand growth isn’t what it used to be. Trade war fears and economic uncertainty still cloud the long-term picture. But right now, value buyers are stepping in—and the charts are finally reacting.
A bounce toward $75–$80 crude? Not out of the question. As long as key support levels hold, oil might just be setting up for a sneaky comeback.
In short: oil may not be pretty – but it’s definitely not dead.
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Image: Shutterstock/Andreas Vogel
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