Just the other day, oil rallied had rallied more than $2.40 to $32.25 on the idea of new central bank stimulus and the snowstorm, which dumped more than three feet of snow on parts of the east coast…
However, we must still be cautious of quick moves in oil, given the excessive oversupply on the market. We must also remember that Iran is about to add several hundred barrels of oil to the market shortly, drenching an already soaked oil market.
OPEC isn’t helping matters either.
On Monday, the self-serving oil group noted the oil market would soon rebalance after hitting 2003 lows -- a sign the exporter has no plans to cut supply.
“We expect that we will go through one more downturn cycle of oil price. But we will recover. The market is definitely going to balance itself because today's oil price is not sustainable whatsoever," Qatar's Energy Minister Mohammed al-Sada told a conference in London, as quoted by Reuters.
Even OPEC Secretary-General Abdullah al-Badri said was seeing reason for optimism, citing forecasts for further growth in global oil demand in 2016 and a contraction in non-OPEC supply.
"We already see some signs that supply and demand fundamentals will start to correct themselves in 2016," Badri said at the conference at Chatham House.
But I’m not one to trust what OPEC has to say. Stay safe.