Oil prices have been supported on a variety of factors over the last few weeks. Low inventories (there was another surprise draw last week), rising demand, increased expectations by the IEA of further demand, and a sharp rise in global vaccination rates have all been supportive.

However, for reasons that are not entirely clear, oil does tend to have a period of weakness from now until the start of December. Is this a perfect time to look for a short term pullback in oil?

Over the last 21 years, WTI crude has fallen 12 times between October 27 and December 17. The average loss has been -5.69%. The largest gain was +21.16% in 2020 in an unusual market and the largest loss was -32.92% in 2008.

Major Trade Risks: The main risk to this trade is of oil resuming its dominant medium-term buy bias. In particular, look out for buyers stepping in at key support at $77.