Oil is going nuclear.
On Thursday morning, the price of West Texas Intermediate crude oil was up as much as 5.5% to as high as $US51.25, and this move follows a more than 5% rally in the price of WTI on Wednesday.
And this is all on the background of an unprecedented decision from the Swiss National Bank to no longer peg the Swiss franc to the euro.
So, a lot going on out there today.
Via Dave Lutz at JonesTrading, here is a quick guide to what traders are saying about crude oil right now:
Opening of Floor Trading has seen a sharp demand continuing for Oil — A few thoughts what’s going on (in absence of headlines I may be missing)
- SNB action is causing a pile of pain on the street. Being short the Franc has been a very popular funding trade — This (among other headlines) causing a pile of pain in the leverage community — Causing a sell of crowded longs (Like the $US) and covering crowded short (Like Oil and Natty)
- Weaker $US a tailwind for Oil and other commodities.
- Oil very oversold. Very. Commented yesterday how weekly RSI hit a record low of ANY commodity at 8.5…. Have to be seeing heavy stop-losses going off.
- Some Keystone headlines hitting, but I don’t think that’s a major impact. There is some chatter that ENB’s Flanagan South pipeline is down (completed in December, brings 600k bpd into Cushing). Have not seen on the wires.
- Some commenting that it’s interesting WTI trading at parity still w/ Brent — While I view as a prelude to US Exports — some chattah that it’s a sign that Shale production is coming off line (not as far as I can see).
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