Oil Prices Set For Another Weekly Gain Despite Falling Back

Despite a sharp drop on Thursday, oil prices are set for another weekly gain as well as a monthly one driven by tight supply coupled with perhaps surprisingly resilient demand. Bloomberg attributed the Thursday drop to technical resistance as well as speculation that Saudi Arabia may start rolling back the cuts if prices rose too high.

Theoretically, that may be true. The question, however, is what level of prices would be too high to sustain with limited supply. There was also concern about more rate hikes from the Fed that would dampen demand…