Is that really a surprise?
Sometimes the timing of moves is just a coincidence and I sure hope this is one of those cases. Oil prices are up $1.03 to a session high $51.80 after the Beige Book.
It said drilling had slowed in shale and traditional oil regions and that companies were planning on reducing capex. That statement should come as a surprise to absolutely no one but the thing is, oil jumped 80-cents immediately after the Beige Book.
Now, oil traders don't tend to be the brightest lightbulbs in the world and I rag on the all the time but even I have to give them more credit than buying that headline. I think it's largely a technical move and a squeeze.
Oil was brushing up against the earlier high before the Beige Book and it might have added just enough fuel for a break or it might have happened anyway before there has been a pattern of squeezes ahead of settlement.
Looking ahead, this marks 4 days of gains but there is still a bit of room on the upside before the tough $54 region. The turnaround today is positive, even if the latest gains don't make a lot of sense.
