Oil prices fell for the third straight day because Saudi Arabia promised to pump more crude. U.S. oil briefly dropped below $100 a barrel. Traders who spent the week panic-buying energy stocks at the top are now refreshing their brokerage apps and wondering if Wendy's is hiring.
The Saudis said they'd increase supply. That's it. That's the whole story. No geopolitical crisis. No pipeline explosion. No tanker caught sideways in a canal. Just a country with oil deciding to sell more oil. Revolutionary stuff.
Retail traders saw crude hit $100 and assumed they'd discovered the next GameStop. They loaded up on call options with expiration dates closer than their next dentist appointment. Then Saudi Arabia made a phone call and those options turned into digital confetti. Beautiful, really.
The "disruption fears" everyone worried about got eased by the groundbreaking revelation that OPEC members can adjust production levels. Shocking that a cartel designed specifically to control supply might actually control supply. Someone should write a thesis on this.
Day traders are now explaining to their spouses that the $3,700 loss was actually a "tuition payment" to the "school of hard knocks." The school's curriculum apparently focuses entirely on buying high and selling low. Accreditation pending.
Charts showed a descending triangle pattern all week. Support levels broke on Wednesday. Every momentum indicator screamed overbought. But sure, the Saudi supply announcement was the real catalyst. Keep telling yourself the news matters. Keep buying the headlines. The market thanks you for your liquidity.
Oil closed Friday down 4%. Retail closed Friday down their mortgage payment.
Photo by Mishaal Zahed (Meschael Zahède) on Unsplash
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