Crude oil futures have shot up more than $4/barrel this morning after a shock move by the Swiss National Bank (SNB) to remove the Swiss franc peg to the euro:
The rally which began on Tuesday now totals 17% and, sadly enough for oil bulls, happens to be the largest percentage rise since the large crude oil decline began during the summer:
A few weeks ago I wrote a post in which I stated that we would know that crude oil has found a bottom when we get the first 20% rally, this might be it. However, that does not mean that oil will surge back above $60/barrel in short order; a messy consolidation between $45 and $55 is much more likely.
Does anyone remember this chart from a few weeks ago?
This analog to the 2013 gold crash could be playing out, albeit from a lower base crude oil price than was contemplated a few weeks ago. The $55-$60 area might be the new upside rally target for crude.
Read also: Oil Collapse of 1986 Shows Rebound Could Be Years Away