Equilibrium at $49 oil?I think the last several days are very telling of the oil industry and shares.
Oil above $50 brings on new production, oil hovering at $49 brings on the pain.
Take a look at the charts and start drawing some lines. Since February we've seen higher lows and a ceiling around $7.60 to $7.80. In the next couple of months the two lines should converge. We're setting up for a classic breakout upwards. It may not be large but trading below $7.00 will be a thing of the past unless something extreme happens.
Shorts are covering and in the next two weeks we should see those results.
Overall, we're seeing less extremes as the oil market finds an equilibrium. For now.
Sellers are less motivated to sell especially as we wrap up 2Q and finish the 2nd half of the year.
Setting up for the next pop upwards. Don't get caught in a long short the next week or two.
All IMO.