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Oil Jumps 9% in Surprise Rebound After Christmas Eve Rout

CommoditiesDec 26, 2018 02:50PM ET
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Investing.com - Has New Year salvation for oil come early?

U.S. West Texas Intermediate crude rebounded forcefully on Wednesday as markets reopened from the Christmas holiday, surging 9% to recoup all of what it lost just before the break and more.

U.K. Brent crude rallied 8% despite markets in Britain remaining closed for Boxing Day.

WTI settled up $3.69, or 8.7%, at $46.22 per barrel. It fell $3.06, or nearly 7% on Monday, after hitting June 2017 low of $42.53. Despite the rebound, WTI remains down 24% on the year and is off 40% from four-year highs of nearly $77 a barrel hit in early October.

Brent was up $3.98, or 7.9%, at $54.57 by 2:42 PM ET (19:42 GMT). It fell to an Aug 2017 low of $50.66 on Monday. Brent remains down 18% on the year and is off 37% from four-year highs of nearly $87 a barrel hit in early October.

The Christmas Eve rout was linked to fears of a potential global economic slowdown and the possibility of a protracted U.S. government shutdown over budget that pushed Wall Street's S&P 500 to near bear-market territory. Stocks rallied sharply in afternoon trading, adding fuel to oil's recovery.

"It looks like there's some help for oil now before the year-end because the selloff on Christmas Eve was probably overdone," said Phil Flynn, senior energy analyst at The Price Futures Group brokerage in Chicago. "But conversely, you can argue that this rebound is also overdone because we just don't know if the bears will return in force after this."

"I'm selling into this strength as I don't believe it will sustain," Tariq Zahir, an oil bear at Tyche Capital Advisors in New York, said.

Oil Jumps 9% in Surprise Rebound After Christmas Eve Rout
 

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Andrew Clift
Andrew Clift Dec 26, 2018 3:06PM ET
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Jeeez- hope there wrent too many in the UK who stated short after xmas eve!
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Barani Krishnan
Barani Krishnan Dec 26, 2018 2:57PM ET
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Hello Robin Rosenberg, thanks for the feedback.If a 9% price surge after a 7% selloff isn't a rebound, I'm not sure what is.
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Mein Ki
Mein Ki Dec 26, 2018 2:57PM ET
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isn't it pretty close in absolute numbers?shall we do the math? 7
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Barani Krishnan
Barani Krishnan Dec 26, 2018 2:57PM ET
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Mein Ki , you're welcome to do your own math.. . All the numbers are here.
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Robin Rosenberg
Robin Rosenberg Dec 26, 2018 1:31PM ET
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Rebound? it just a correction. You people need someone on staff that knows how to analyze these markets.
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Ben Samlot
Ben Samlot Dec 26, 2018 1:31PM ET
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Ehat’s the difference between rebound and correction ?They are synonyms.
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Ben Samlot
Ben Samlot Dec 26, 2018 1:31PM ET
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What’s
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Robin Rosenberg
Robin Rosenberg Dec 26, 2018 1:31PM ET
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Ben Samlot. . Hi Ben,. To me a rebound indicates the market has reversed course. A correction indicates a contra move in an on going trend. At least that's how I know it. I was a floor trader on the CME for 15 years. I was trading in the S&P pit in 1987. Been in futures for over 40 years. I work with one of the finest technicians in the business now. For all we know the break may have been a long over due correction in a very short period of time.
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Ben Samlot
Ben Samlot Dec 26, 2018 1:31PM ET
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Hi Robin,I never questioned your experince or your trading skills. I also have some experience on the stock market and IMHO a rebound does not indicates the changing of a trend. It could be, but it coud be just a correction. But thIs is just a linguistic debate. Otherwise I agree with you. This move is just a correction in the trend.
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Santiago Payan
Santiago Payan Dec 26, 2018 12:59PM ET
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Wti can go up 30 percent of the down movement (76,40 - 42,36 = 34 ) (34* 30%= 10,21) so the low 42,36 + 10,21 gives me a target of 52,57
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Kumar Dushyant
Kumar Dushyant Dec 26, 2018 12:59PM ET
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there is nothing wrong in seeing a dream.....I don't think you have any knowledge abt mrkt......... neither technical nor fundamental
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Ben Samlot
Ben Samlot Dec 26, 2018 12:59PM ET
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It definitely can happen. And that would still be only a correction.
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Ben Samlot
Ben Samlot Dec 26, 2018 12:59PM ET
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44.5 is the 61.8% fibo retracement level of the rise from ~26 in early 2016 to ~76 in this october. This is a major level and the market bounced sharply so this could be a major upward correction in the near term.
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Sanjib Saha
Sanjib Saha Dec 26, 2018 12:36PM ET
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just sell, it will go down at the end of the day, no important breakthrough in fundamentals , rather worsen
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Anil Kapur
Anil Kapur Dec 26, 2018 12:31PM ET
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surprised rebound. drop has no logic , rise has no logic
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Jamario Walker
Jamario Walker Dec 26, 2018 12:31PM ET
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yea, I just closed my USO position last week and picked up DBC because of it's broader approach. My USO would probably be up more than DBC right now, lol
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