Saudi Arabia and Russia just destroyed the oil price rally, potentially putting an end to all the speculation about what the group might do next. But higher production doesn't necessarily mean higher oil prices are entirely out of the question, and in fact, the oil market is still faced with a ton of uncertainty.
From $145 to $35 to $115 to nearly $25 and now to back above $70, the price action in the oil market has been a roller coaster for a full decade now, and the question on every trader’s mind is “how far will we rise before dumping again…and what does that mean for other markets?”
The Trump administration is cracking down on Venezuela and laying down threats of the toughest sanctions Iran has ever seen, adding to the risk premium for oil while there are signs that U.S. and global supplies are tightening.
The S&P gave us exactly what we talked about yesterday, a constructive session with buying interest. The Russell 2000 has quietly been a leader for much of the post-correction trade and yesterday it set a new all-time high.
Oil has taken off like a rocket as Israel strikes Iranian targets in Syria in response to rocket fire overnight. Israel says it targeted Iran’s military infrastructure in Syria, in response to an Iranian rocket attack on the occupied Golan Heights.