• 3 minutes War for Taiwan?
  • 7 minutes How China Is Racing To Expand Its Global Energy Influence
  • 10 minutes Is it time to talk about Hydrogen?
  • 3 mins U.S. Presidential Elections Status - Electoral Votes
  • 6 hours Mail IN Ballot Fraud
  • 21 hours Supreme Court rules against Cuomo's coronavirus limits
  • 58 mins “Cushing Oil Inventories Are Soaring Again” By Tsvetana Paraskova
  • 5 hours Biden's Green New Deal- Short Term - How Will He Start to Transition Out Of Crude?
  • 8 hours America Could Go Fully Electric Right Now
  • 12 hours Saudi Arabia Seeks to Become Top Hydrogen Exporter
  • 3 hours WTI / ​​​​​​​Price Forecasting 
  • 2 days “Consumers Will Pay For Carbon Pricing Costs” by Irina Slav
  • 3 days Censorship in USA

Breaking News:

Volkswagen Readies Compact EV For 2023

Why Gold Prices Could Be Set For Another Rally

Why Gold Prices Could Be Set For Another Rally

Gold has had a particularly…

Brazil’s Oil Giant Slashes Its Five-Year Investment Plan

Brazil’s Oil Giant Slashes Its Five-Year Investment Plan

Brazil’s state oil giant Petrobras…

Editorial Dept

Editorial Dept

More Info

Premium Content

Should Traders Trust The Drop Or The Bounce Back In Oil?

It has been an interesting couple of days in oil futures. The commodity had its worst day for a while yesterday as traders reacted to Donald Trump’s tweet threatening an escalation in the trade war with China. This morning (Friday), however, oil is bouncing back, and at the time of writing has recovered around half of yesterday’s losses. So, which move should traders and investors trust, the drop or the bounce?

The pattern shown in the above chart for the futures contract, CL, is one that is familiar to stock traders. Ever since the 2016 election, stocks have shown a tendency to overreact to Trump’s tweets, then recover losses quite quickly.

There are numerous single-stock examples of this, from Boeing falling on an early tweet from then-President-elect Trump about Air Force One to reactions to more recent attacks on Amazon (AMZN) and other more generalized attacks and threats aimed at big tech companies. The broader stock market has also reacted in the same way when Trump has tweeted about trade. In those cases, too, the initial negative response has proved to be an overreaction, as evidenced by the fact that the major indices keep hitting new highs.

There are, however, several differences when it comes to oil. The first is that oil traders tend to take a longer-term, more global view than the stock market.

We frequently hear from stock traders and analysts that the strength in the U.S. economy allows America to “win”…





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News