"There is an expectation that when the equity markets complete the current correction, oil will resume its upward trajectory to test the 65 usd level," noted Harris.
Here's the daily chart of oil:
Notice that despite the sell-off this week, the market is still in an uptrend. Because we're close to the current trend-line, this week's action is pretty important from a technical perspective.
However, there are strong fundamental reasons for oil to increase. Once again, remember that we have India and China growing. So long as these economies are making large GDP advances there will be upward pressure on commodity prices. We're also entering the summer driving season in the US, adding further upward pressure.
