Global macro overview for 04/02/2016:
The situation in the oil market is very unstable as investors are reacting emotionally to any rumors about news feed. Yesterday, the oil advanced sharply amid the rumor about 6 (non-Saudi) OPEC members agreeing to an emergency meeting - it pushed crude higher despite dismal production, inventories, and demand data. Today, the rumor of the day seems to be an "intensive preparations by Turkey for a military invasion on the territory of the sovereign state of Syria" - this one comes from Major General Igor Konashenkov, Defense Ministry spokesman. It is perfectly normal in the current market conditions, after such a long period of supply pressure in the oil market, any rumor in the news feed might cause " buy the rumor, sell the facts" behavior among the investors. Caution is advised currently and those traders who feel insecure trading on such sharp moves should stand aside of the markets for some time.
From the technical point of view, the oil price is still trading below the 2009 bottom, below 50,100, and 200 daily moving averages as well as below the technical resistance at the level of 34.82. There are no signs of the downtrend to be stopped soon as long as at least one important resistance level is clearly violated. The recent emotional price rally seems to be another correction inside the downtrend.