With all the messiness that’s occurring in Syria it’s surprising that something worse (from a geopolitical standpoint) than this morning’s shootdown of a Russian fighter jet by Turkey hasn’t already happened. Here’s a cute graphic from Citi that hopes to explain what is a very murky situation in Syria:
Crude oil futures are rallying more than $1/barrel this morning supposedly catalyzed by the Turkey shoot down of a Russian fighter jet:
However, I would venture that crude oil was waiting for an excuse to ignite a short covering rally in what has become a heavily shorted market:
The gross short position in WTI crude futures has jumped considerably in recent weeks
What’s more interesting about this morning’s crude reversal is that just yesterday I was looking at the following chart and mentioning to a couple of people that crude usually makes a low at this time of the year and December is usually a good month for black gold:
$40/barrel is a crucial level for a number of reasons and it is no accident that every time price falls below this level for even a few hours it quickly reverses back above. There’s a good chance that crude oil made an important low and Turkey is spelled with a capital T this Thanksgiving…