Crude oil is no strangler to 80% declines and it has proven it can come back. Futures and options broker, Carley Garner, analyzed the oil charts with Jim Cramer on Mad Money (April 28th, 2020).
The oil market needed to contend with an extreme but somewhat transitory, phenomenon. After all, the US is slowly turning the economy and, therefore, energy consumption, back on, and oil producers around the globe have been forced to slow down production. The cure for low commodity prices is always low commodity prices.
The Baker Hughes rig count reported on Friday that 60 rigs had fallen offline in the previous week to leave only 378 crude oil rigs in operation. We haven’t seen the US shale industry cut back like this since early 2016, which happened to mark the low for oil for years to come.