In this bipolar market, where only momentum, liquidity, technicals and short squeezes matter, as well as the occasional kneejerk reaction to a flashing red headline (usually some lie out of Venezuela or Nigeria about an imminent OPEC meeting which has not even been scheduled), one thing that no longer seems to have an impact on prices is actual news and fundamentals.
As noted yesterday morning, "Goldman does it again" when just hours after Goldman said the "bearish cash for iron ore was intact," the commodity recorded its biggest surge in history crushing anyone short, and soaring 20% across the globe.
The key (recurring) catalyst for today's early spike in oil, was the latest desperate attempt by an imploding OPEC member, this time Nigeria to push oil higher when overnight its petroleum minister Emmanuel Kachikwu said that key members of OPEC intend to meet with other producers in Russia on March 20 to renew talks on an agreement to cap oil output, Nigeria’s petroleum minister said.
The headlines in question:
Less than 24 hours ago we presented the latest reason by JPM's Mislav Matejka explaining why the equity strategist refuses to buy this market, to wit: "equities are down ytd, but notably the ’16 P/E is not much cheaper today than it was at the start of the year. In fact, for the US, the P/E multiple is currently higher than it was on 1st January, at 16.8x vs 16.6x then."
One week ago, we reported that even as traders were focusing on the daily headline barrage out of OPEC members discussing whether or not they would cut production (they won't) or merely freeze it (at fresh record levels as Russia reported earlier today) a bigger threat in the near-term will be whether the relentless supply of excess oil will force Cushing, and PADD 2 in general, inventory to reach operational capacity.