by Chris Becker
Earlier this week I spoke about the epic ride of crude oil prices and how investors need to expect volatility in the weeks and months ahead, not discounting the probability of 20-50% rallies and corrections. Overnight we had a 10% drop – the biggest since 2009 – on a much larger than expected inventory buildup, nearly erasing half the gains of the recent few days, were WTI went from $38 to nearly $50USD per barrel:
Where crude will end up in the short term is anyone’s guess, with the possibility of this volatility pushing crude back up to $54 or to revisit the sub $40 lows. The longer term view also points to lower prices, as I’ve explained here.