Oil traders woke to the news of an oil ship explosion near Saudi Arabia.
This, alongside hopes of a quick recovery from the Covid-19 due to the vaccine, boosted oil prices higher.
However, prices started retreating into the US trading session.
After testing intraday highs of 47.39, oil prices turned lower.
We could expect the current declines to push prices down to the 45.00 level.
Establishing support near this level could potentially confirm further gains.
However, if oil prices lose the 45.00 handle, then we could expect to see the onset of a deeper correction.
For the moment, oil prices are likely to consolidate back near 45.00.