Following a 3-sigma fall yesterday, WTI crude has rebounded exuberantly amid the European ecstacy and the Iran Oil Embargo. Up almost 9% from late yesterday's lows (a 6-sigma jump), it appears yet another squeeze is in play (perhaps from demand-pull on the back of Hillary's unyielding national policy - oh yeah apart from China and Singapore [6]). While the WSJ notes [7]: "There's no material price premium from the Iran issue", it seems the potential for an epic short-squeeze - as Iran's largest importer of Oil (cough China cough) is now exempt (and continuing to hoard [8]) leaving refiners potentially tight on supply - as macro tail-risk is seemingly removed from the downside by the 'nothing' summit we just experienced.
WTI swings of outrageous fortune...
[9]
as WTI reverts (like every other risk asset) to last week's end of week levels as Europe's imminent demise is demoted to a one month problem...
We can only assume that all those airlines hedging and gas stations are timing these moves perfectly to make sure that the 'tax rebate' of lower gas prices stays with us and creates a self-sustaining recovery </sarc>