Oil glut fears are easing as demand surprises to the upside, with the International Energy Agency revising forecasts after stronger consumption and weaker-than-expected supply growth.

The light sweet crude oil market has bounced a bit as the 50-day EMA continues to offer support, but we do continue to see a little bit of resistance at the $60 level. Any rally at this point in time almost certainly will continue to push this market towards the $62 level, which is a large, round, psychologically significant figure.

An abrupt surge in oil prices could cause inflation to rise and spark volatility in markets. Brent on Tuesday jumped to the highest level since November.

February WTI crude oil (CLG26 ) on Tuesday closed up +1.65 (+2.77%), and February RBOB gasoline (RBG26 ) closed up +0.0327 (+1.82%). Crude oil and gasoline prices rallied sharply on Tuesday, with crude posting a 2.

WTI trades near $59 after a more than 4% drop erased most of this week’s gains. Crude remains below all major moving averages, with the 100-day EMA near $60.1.

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The American Petroleum Institute (API) estimated that crude oil inventories in the United States saw a build of 5.27 million barrels in the week ending January 9.

Crude oil rebounded from a key support zone, forming a higher low that keeps the bullish recovery intact and sets up another test of resistance near the 200-day average.