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.
We are seeing wild price swings in crude oil due to Hurricane Joaquin. While oil has plenty of reasons to rally other than the storm, like declining oil output and increased geopolitical risk, the track of the storm seemed to encourage a selloff.
Crude oil is up because production is down. We are also getting a boost from better than expected manufacturing data in China and the increased risk geopolitical risk premium because of Russia's actions in the Ukraine.