Dead cat bounce in oil
Oil is back near the lows after a 2% bounce following yesterday’s rout has faded. WTI is now flat on the day at $57.94 after rising as high as $58.98.
It’s all about the trade war at the moment with the market fearing that curbs in US-China trade will hurt global growth and sap demand. It’s a legitimate fear and it’s permeating throughout financial markets. At the same time, inventory data continues to show builds in US supplies. That will reverse in the coming weeks but the turn has been slow to materialize.
For now, it’s all about yesterday’s low of $57.35 holding. Current levels are near the 100-day moving average, which clocks in at $57.99. Beyond that there isn’t much until the early March lows at $54.52 and I wouldn’t classify that as a particularly strong spot.