Oil prices are seeing one of their largest daily gains in history which I believe is due to the weekend drone attack on Saudi Arabia’s key oil facility. That said, a little perspective is needed because despite the historic one-day change in price, West Texas Intermediate (WTI) Crude remains in a tight trading range between $55-60/barrel (Figure 1). Frankly, I think it is surprising the S&P 500 (SPX) Futures are only down a half percent this morning given the more aggressive rhetoric coming from the White House as the President tweeted – we are “locked and loaded” suggesting a military strike is ready to go. This limited market response thus far suggests churning action early this week with no major move in either direction pending clarity the Saudi response to the attacks and the Fed rate decision Wednesday. Stay tuned – it is going to be a very interesting week.
Figure 1 – Despite jump Oil remains in recent range – for now
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