Oil’s Big Rally Only Brought Prices Back to Monday’s Levels

(Bloomberg) -- Crude posted the biggest gain since 2016, but the rally only restored oil to levels last seen seen on Monday morning.

The U.S. benchmark surged 8.7 percent Wednesday to close at $46.22 a barrel. It was a rare time that oil has climbed more than a few percentage points, amid a rout that has wiped nearly 40 percent off the price of crude. The swing between the Christmas Eve carnage and Wednesday’s exuberance has kept oil market volatility at high levels after a spike in November.

“We saw the market got hit really hard and we’ve had a couple of these strong bounces and they seem to be pretty short-lived,” said Gene McGillian, manager of market research at Tradition Energy, an energy consultancy based in Stamford, Connecticut. There are still “concerns about slowing demand growth and excess supplies.”

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