The news of the death of the Saudi King Abdullah this morning has ignited a rally in Nymex crude during futures trade with a rally of 92 cents or 1.99% per barrel.
Traders will be concerned that the new King, Abdullah’s half brother Crown Prince Salman bin Abdulaziz, will deviate from recent policy leading to a reduction in production and potential for a short squeeze.
But with the EIA reporting last night that US crude oil stocks increased by 10.071 million barrels last week after the 5.389 billion build the week before there are signs that demand has weakened.
Which means we have a market.
Here’s the 5 minute chart showing the spike.