Last week's market movement seemed to coincide with Tom Luongo's assessment that the six-month decline in oil was exaggerated.
However, he discovered that OPEC+ was planning a surprise output cut that Sunday morning. This announcement led Brent Crude to spike at roughly $85 per barrel, WTI to rise above $80, and the Brent/WTI spread to trend towards $3. This is great news for US producers and exporters. Despite a more optimistic outlook now than in January, the oil market still has a fundamental supply-and-demand mismatch.
Luongo feels that the heightened volatility in the oil market is causing instability in the interest rate and currency markets. He also said that using volatility to target the US stock market was a method to discredit Trump while pushing the US dollar lower.
Finally, he contends that creating a market too volatile for the average person or small hedge fund to trade is a sure way to ruin it, as it can flush out the little specs and reduce market liquidity, making it the playground of those with the deepest resources.
Source:
Tom Luongo, 7 April 2023, "Luongo: Davos Runs Into The OPEC+ Buzzsaw", Zerohedge, https://www.zerohedge.com/geopolitical/luongo-davos-runs-opec-buzzsaw?utm_source=