Is there an oil price correction coming?

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Even as Baker Hughes reported a rise in the number of active drilling rigs in the United States on Friday, oil prices continued to see gains on Friday afternoon.

At 4:19pm EDT, WTI crude was still up 1.32% on the day at $56.97. Brent was still up over 1% on the day, at $59.44—dangerously close to the $60 psychological threshold for the benchmark.

Last week at this time, the spot price for Brent was just $55.04. The near $5 gain is due to a combination of factors, including a large crude oil inventory decrease in the United States, continuing OPEC+ production restraint, Aramco’s price hike to crude for Europe, U.S. traders drunk on stimulus chatter, and whispers of an overall tightening oil market.

These are bullish signals indeed. But can this uptrend last amid lockdown extensions and oil demand that just isn’t there yet?

When a stimulus deal is finalized, oil prices are expected to jump—this is certainly still bullish. But on the bearish side, oil demand is still lagging, and some analysts are not calling for a full rebound in demand for years—if ever.

The EIA, for one, doesn’t see U.S. energy consumption rebounding fully for another eight years. That’s certainly on the bearish side.

Will OPEC will be able hold back the flood of supply until that time? Can they afford not to? Russia is still itching to ramp up its oil production, leery of opening the door for U.S. shale producers. For now, Saudi Arabia is happy to take one for the team, resigned to curb production so others in the group will continue with at least some of the cuts.  For now, OPEC’s actions are bullish.

The EIA sees U.S. oil production setting new records, but not until 2023.

Goldman Sachs, however, is still bullish, calling for $65 Brent by mid-year, with WTI in the low $60s.

Rystad Energy, however, sees a price correction on the horizon.

“Many technical indicators are flashing red, so a price correction soon would not be unsurprising,” Rystad said on Friday, according to Oilfield Technology.