One day after oil crashed by a near-record 25%, a move which made some sense in light of the historic dollar short squeeze and surge to all-time highs in the Bloomberg dollar index, today oil has rebounded violently, and after rising as much as 26%, WTI settled up $4.85 at $25.22, or 23.81% higher...
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... its biggest one day move on record!
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There was no actual catalyst, although some oil traders cited a rogue rumor that emerged just before the big spike according to which "Putin has instructed Novak to engage the #Saudis 🇸🇦 to resume #OPEC+ supply cuts."Â
#Oil prices are green again.
— Yesar Al-Maleki (@yesar) March 19, 2020
Why?
🔴 🇷🇺 Rumors #Putin has instructed Novak to engage the #Saudis 🇸🇦 to resume #OPEC+ supply cuts.
🔴 🇺🇸 DoE announced tender for 30 million barrels #SPR stocks. All from small & mid sized #American producers.#OOTT pic.twitter.com/29N3oU0kF3
However, that was merely a regurgitation of a rumor that hit one day earlier.
Remarkably, today's record surge took place even as the dollar index continued to soar, suggesting the move was most likely a counter-trend short squeeze.
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That said, putting the move in context, despite today's record surge, oil is still down 17% for the week.
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