Largest Rally in Oil Since Bear Market Began

posted in: crude oil | 20,284

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:

CL_fibs

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:

WTI_Daily

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?

Gold_oil_crash

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


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