RE:Oil tanking This is why and what I posted last night. Never ignore price action it tells you how to trade:
1nt2Trade wrote: Typically it takes 2.5 days for a significant fundamental news event like the FOMC to be priced into the market. So likely you see a small spike in oil tmr and some more downside with the US dollar strength. Longer term typically oil trades flat in Dec net net then drops in Jan spikes a small bit then bottoms mid feburary. A seasonal rally is very very probably from Feb until May. Inventory builds are largely ignored with the aniticpation of late spring summer demand. During this period you can ignore OPEC rumor sipkes they are usually temporary..... seasonality strength is very powerful during this period.
Near term look at the price action you had a huge gap up on monday following very positive bullish news of a larger then expected OPEC cut. However that was sold off in almost 2 days. Even following today when there was a fairly bullish EIA report that was sold off before the FOMC announcement. These near term reactions to fundamental news are a clue to the near term price action you should expect.
Rig counts are spiking very nice and the drilling Co's have been outpreforming. US production is up 200K BOE's in about 1.5 months and this trend should continue since the rig count lag foretells probable future 2-3 month forward production.
In an election year usually the indicies drop soon after the election but this year was the exact opposite. While rare we have seen this post pres rally before in the past. Usually this type of rally lasts until inaurgration then you see a correction once the market realizes that the policies promised might not be practical to implement. Trump has lofty aspirations and is used to doing things hs way but in politics he has alot of people to stick handle around that he can't just veto in the way he can in business.
Or if you want the media after the fact explanation:
https://www.cnbc.com/2016/12/14/oil-prices-fall-after-us-hikes-interest-rates.html
Watch for a bounce @ $49.75ish.