I called crude’s bounce last week, here’s what I see happening next

 Oil workers working well

About two months ago, we called for a bounce in oil once it dipped below $43 per barrel on an intraday basis.

When it reached the $46 mark, we said it could and should go further, with a $50 target, while the consensus view said just the opposite.

This call has gone quite well, as WTI crude was trading just below $48 per barrel on Monday and bumping up against the $50 mark last week.

However, I should note that the one reason we were so negative on oil for the first five to six months of this year is beginning to raise its head again: the underperformance of energy stocks.

Indeed, the energy-tracking XLE exchange-traded fund has begun underperforming once again.

Of course, this is due partially to the situation with North Korea, so perhaps the XLE can bounce nicely going forward.

If the XLE, which was trading on Monday just below $64 per share, breaks below the $63.90 to $64 range in a meaningful fashion, it's going to be negative for the group, and for crude, to which it's closely tied.

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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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