All eyes are still set on oil as the commodity continues to perform well, climbing above the 85 USD level on Monday, confirming the long-term bullish trend. 

It is hard to believe that in April 2020, oil dropped below 0 USD as nobody wanted the commodity. Fast forward to today, the WTI benchmark is trading at levels last seen in 2014.  And it looks like the bull market can go on further. The 100 USD psychological level could be reached this year.

Oil was also supported by the recent Goldman Sachs analysis by Callum Bruce. The bank estimated that global oil demand has surpassed 99 mb/d and will shortly hit its pre-COVID level of 100 mb/d as Asia rebounds post the Delta wave.

Furthermore, OPEC+ is adding output back on the market gradually while stockpiles are steadily declining and JPMorgan warned on Friday, that Cushing could be effectively empty in just a few weeks.

It looks like the energy crisis is far from over, pushing higher energy prices everywhere. Natural gas is above 6 USD, the highest since 2014. Moreover, if there is a harsh winter in Europe, which analysts expect, energy prices will likely soar further.

Lastly, everybody but the central banks know that inflation would not be temporary, benefiting commodities. Oil tends to be one of the best inflation hedges, and it has confirmed this role pretty well recently. Because it has jumped from below 0 USD to the current 85 USD, it has outperformed both gold and silver. 

Gold is up nearly 10% since April 2020, and it has not moved anywhere over the last year. It remains stuck near 1,800 USD. If we take 15 USD as the reference bottom in April 2020 for oil (although it was even below 0 USD), then oil is up nearly 500% in 18 months. 

Technically speaking, as long as oil remains above 80 USD, the medium and long-term outlooks appear bullish. Dips are expected to be bought. Traders seem to be ignoring the overbought conditions in the market for now.