Oil prices jumped 2 percent Friday after Baker Hughes reported the number of rigs drilling for oil in the United States fell for the 26th consecutive week.
Meanwhile, the number of analysts and pundits chiming in on where oil prices are headed from here reached a crescendo last week, which identifies this level near $58 in West Texas Intermediate this week as an inflection point from which the next profitable trade is likely to begin.
The chart below plots the monthly chart of Nymex crude oil prices since 1990 and shows that the contract bottomed at $46 per barrel in late March, precisely at the March 1994 benchmark low in the contract. It has since rebounded by almost 30 percent.
This chart is proof that the market has a memory and that old benchmark highs and lows matter. The big question is "where to from here?"