As you know, the oil industry has been in a severe depression since 2014. Oil prices plummeted from over $100/barrel all the way down to $30/barrel. Today, that figure hovers around $50 and is showing little signs of returning back to the $100 level any time soon. As bullish speculators continue to get burned by “demand is finally back” or “supply is finally falling,” more and more oil giants fall on serious hard times.
Exclusively on DohmenCapital.com
Oil recently had a nice three day rally of about 20%. Suddenly the “gloom and doom” about this complex vanished and analysts were quick to conclude that a bottom in oil had been made. I say, “not so fast.”
Oil (light crude index) had a 59% decline ($63) going into the low of January 28. A $9 rally is just a bounce from the low, probably maneuvered by the high frequency trading operations to squeeze the overwhelming number of shorts. It worked.