S&P Dow Jones analyses oil gains

Jodie Gunzberg, global head of Commodities and Real Assets at S&P Dow Jones Indices, comments on the S&P GSCI (WTI) Crude Oil Index 3-day gain of 14.4% ending Feb. 17, 2016.

Gunzberg notes that this is the biggest 3-day gain in about 6 months for the index, and historically, gains of this magnitude have only happened near oil bottoms.

 

“The S&P GSCI (WTI) Crude Oil posted a 3-day gain of 14.4% ending Feb. 17, 2016. This is the biggest 3-day gain in about 6 months for the index, and gains of this magnitude have only happened near oil bottoms.

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“After the index hit its lowest since Nov 4, 2003, on Jan. 20, 2016, it capitulated, reaching near that level again, a few days ago on Feb. 11. Then oil spiked on news of the possibility of a production freeze from OPEC and non-OPEC producers, but quickly waned after hopes diminished and the reality of the lack of potential impact hit. OPEC has the ability to be the swing producer given its large market share, spare capacity, low production costs and capability of acting alone or in a cartel; however, U.S. inventories need to be low for it to matter.

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