Perhaps more than any other market, oil is very susceptible to political changes. Last week's news from Egypt made the oil market very concerned about the Suez Canal and the Middle East in general. Hence the move higher. However, the real move is seen on the monthly chart:
For the last two years, oil has been consolidating in a symmetrical triangle pattern. Over the last month, prices have broken through upside resistance. While the volume is weak, remember we've only seen one week of trading.
Also remember that this latest move is based on political events, not fundamental. Europe is still in a recession, China is still slowing and the US is still growing slowly. In addition, we still have a strong supply position.
