It’s a volatile time for oil, with crude prices up 4% after a 7% plunge just a day earlier. Some warn, however, that a bull trap might be forming with the market’s latest rebound.

Stock Market News

WTI was up $1.93, or 3.61%, at $54.36 per barrel by 12:35 PM ET (16:35 GMT). In Monday’s session, it fell around 7% to a 13-month bottom of $52.77. Brent, the global benchmark for oil, rose $1.36, or 2.17% to $63.89. On Monday, it hit a nine-month bottom of $61.73.

Both rose more than 1% in early Wednesday trade on estimates by industry group American Petroleum Institute of a drawdown in crude stockpiles last week instead a build. The previous session’s 7% slide also prompted some short-covering and bargain-hunting for crude, traders said.

But what few anticipated was the market extending gains after the U.S. Energy Information Administration (EIA) showed a ninth-straight week of crude builds last week, and more than forecast. “It’s a surprise on a few different fronts,” said Tariq Zahir, managing member at New York’s Tyche Capital Advisors.

“We feel the gains we see today will be limited and could reverse, especially if a risk-off attitude develops and the dollar gets some strength,” said Zahir, who expects U.S. crude futures to break below its landmark $50 support soon.

How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition – $14.95

The EIA data showed that crude oil inventories increased by 4.85 million barrels in the week to Nov. 16, vs. a forecast build of 2.5 million barrels.

The report also showed that gasoline inventories fell by 1.30 million barrels, compared to expectations for a draw of 0.2 million barrels, while distillate stockpiles dropped by just 0.08 million barrels, compared to forecasts for a decrease of 2.75 million.


Today’s Stock Market News

“The crude build aside, the real eye opener was the smaller-than-expected draw in distillates, which basically tantamounts to a no-draw, surprising given the cold spell we currently have in the Midwest and East Coast,” Zahir said.

Most traders have a bleak outlook for oil despite OPEC hinting over the past week that it might decide to cut production by as much as 1.4 million barrels per day when it meets in Vienna on Dec. 6. Many dispute such a wide cut happening as OPEC leader Saudi Arabia has only offered to reduce 0.5 million bpd on its own and would need non-member Russia’s cooperation for the balance, a plan Moscow has resisted so far.

Nespresso Vertuo Coffee and Espresso Machine Bundle with Aeroccino Milk Frother by Breville, Red – Price: $162.31

President Donald Trump’s persistent calls on OPEC not to cut production and to keep oil prices low has also weighed on the market as the U.S. president is seen as key for Saudi Arabia to avoid sanctions for its alleged role in the murder of Saudi-born U.S. resident and journalist Jamal Khashoggi.

“I think we have a very noisy couple weeks ahead of us, and a volatile market that is making it increasingly difficult to express a view in a limited loss format,” said Elliot Klapper, managing director for commodities at Goldman Sachs (NYSE:GS), in a note to clients.

5 thoughts on “It’s a volatile time for oil, with crude prices up 4% after a 7% plunge just a day earlier. Some warn, however, that a bull trap might be forming with the market’s latest rebound.

  1. Pingback: Oil prices plunged to their lowest since late 2017 on Friday in choppy trading, weighed down by an emerging crude supply overhang and a darkening economic outlook – Stock Market News Today

  2. Pingback: The failure of so many investment strategies is viewed by some as a warning of what could come following years of above-average returns – Stock Market News Today

  3. Pingback: Toronto’s commodity-linked stock market set for rebound if oil prices recover – Stock Market News Today

  4. Pingback: A month since raising crude forecasts, banks reduce expectations for both the global and U.S. oil benchmarks – Stock Market News Today

  5. Pingback: Mexico has significantly reduced imports of U.S. gasoline. Cutback comes as a government crackdown on fuel theft leads to shortages across the country – Stock Market News Today

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.