Oil Moves 0.3% Because Two Countries Talked on a Phone

Oil rose on Friday. Not surged. Not rallied. Rose. The kind of move that gets your portfolio from bankrupt to slightly bankrupt.

The reason? Peace efforts between the U.S. and Iran. Peace efforts. Not peace. Not a treaty. Not even a handshake. Efforts. Someone made an effort and traders bid crude up like they just discovered the last barrel on Earth.

Here's what happened: Two governments agreed to keep talking instead of bombing each other for maybe another week. The market interpreted this as bullish. The same market that sold off crude when the peace efforts were announced last month because peace means less supply disruption. The same market that bought crude when tensions rose because war means more supply disruption. The same market that will do the exact opposite next Thursday because a diplomat sneezed during a Zoom call.

But sure. Your technical indicators saw this coming. Your MACD crossed over. Your Fibonacci retracement lined up perfectly at $68.42. You called it. You and eleven thousand other morons who also called the opposite direction with the same indicators and are currently explaining to their wives why the grocery budget went to an oil ETF.

The best part? It happened before a long U.S. weekend. Memorial Day. The market closes Monday. Which means American traders bought oil Friday afternoon, then spent seventy-two hours praying Iran and the U.S. don't announce a peace deal or a war or anything else that might make them wrong. Nothing says confidence in your trade like three days of compulsive phone-checking at a barbecue.

Oil closed up forty cents because peace might happen or might not, and retail traders are now geopolitical experts with positions they can't exit until Tuesday.

Photo by Documerica on Unsplash