Oil prices rallied on Monday supported by better risk appetite and a positive demand outlook in OPEC’s monthly report. Brent is up 1.6% to $82.77/bbl and WTI up 1.8% to $78.58. The USD index fell 0.1% ahead of today’s US CPI data, which should be important in framing the near term Fed outlook (see MNI CPI Preview). Possible further Fed tightening has weighed on crude lately and with the demand outlook the market’s focus, a strong CPI could drive oil lower again.

• Brent rose through $82 during the NY session and then made a high of $82.84/bbl, breaching resistance at $82.20. This opened key short-term resistance at $83.60, November 3 high. It fell to a low of $80.41 during the European session.
• WTI is currently close to the intraday high of $78.64. Resistance is $80.20, October 6 low. Earlier it fell to a low of $76.21.
• OPEC revised up its demand expectations for this year by 100kbd to 2.5mbd.
• Signs that the US is tightening its enforcement of the price cap on Russian oil also supported crude on Monday.
• Technicals were signalling that the market was oversold.