ZH believes that the oil market is following the lead of the other major markets and is overestimating the probability of a recovery in a relatively current timeframe. Here is the May 09 West Texas crude contract over the past month:Sphere: Related Content Print this post
Given the basis on oil has been pretty negligible recently, this is a good contract to track. Going forward, oil is going to continue to be driven by the strength of the dollar and the short term outlook for equities. As we believe that we aren't anywhere close to being out of the woods, it's unlikely for spot oil and near contracts to go much higher than the $55 level.