Less than a month ago the CBOE volatility index – known as the best indicator of fear in the markets – dropped to a record low of below 9. The declines were a result of steady equity markets, low trading volumes, and optimism that the markets were heading higher. This has all changed in the past two weeks, with the fear index rallying from a low of 9.52 to 17.28 – an 81% spike in 4 days from Aug 8 to Aug 11.
The crude oil trade has been totally eclipsed by the focus on the so-called glut of crude even as the oil market, due to massive supply withdrawals, is the tightest it’s been in years when you compare it to record demand. The forward demand cover on oil supply in the United States has fallen to 26.7 days of supply, which is the lowest since Oct. 2, 2015.