While Wall Street was on holiday prior session, the oil market turned heads with headlines suggesting Saud/Russia freeze deal. WTI and Brent surged more than +500bps with gains not sustainable after the market realized it was more political jawboning via headlines. The inability to hold these gains on an illiquid day confirms the short squeeze ammo is out of juice. In fact, The Oxford Institute for Energy has a Feb’16 report titled: Russia and Opec Uneasy partners laying out argument of Saudi/Russia oil freeze deal is highly unlikely.
Read more: http://stockboardasset.com/special-situation-trades/morning-note-september-6-2016/