For more than a year now, commodity prices have been under pressure from the strong U.S. dollar and slowing global demand. This has made a huge dent in the balance sheet of many net exporters of resources, in turn weakening their currencies.
Well bless my soul, what's a wrong with oil? It's itchin' like a man in with a festering boil. The trading is actin' wild as a bug. It’s confused; it’s all shook up! Mixed signals is making for crazy volatility as opinions on the future of crude oil are as diametrically opposed as Bernie Sanders and Ted Cruz.
Crude oil is putting on an old-school risk-on rally reminiscent of the early days of quantitative easing. Not only is oil getting support from production destruction, it is also getting help from the Fed minutes.
The market has that easy money feeling again, a phenomenon that was thought to be fading into the rear view mirror on the heels of the U.S. economy. The inaction of the fed last month coupled with the soft jobs data from Friday have market participants acting as if zero interest rates are here for good.