Crude oil just had its best day ever, only a day after its third-worst drop in history.
West Texas Intermediate jumped more than 23% to $25.22 a barrel on Thursday. However, it remains on track for its worst monthly decline on record as a supply glut and demand concerns keep oil investors on edge.
Three market experts weigh in.
Jeff Currie, global head of commodities research at Goldman Sachs, says selling across commodities has been indiscriminate.
"I think we have more downside. When we look at the demand losses, they're unprecedented — not only in oil but the entire commodity complex, and particularly those commodities that are more leveraged to this whole idea of self-isolation. Not only is oil down because we're not moving around, but also things like beef that are leveraged to restaurant demand, they're down. ... There's another dynamic at play here that's really became more important in commodities in the last, I would say, two to three days, which are liquidity constraints. And if you look at gold, a lot of people ask why is gold going down right now. One of the key reasons why gold is going down is because people are selling assets to raise cash.
Paul Sankey, oil analyst at Mizuho, sees more trouble ahead for oil prices unless excess output is reined in.
"It's simply a question of when you don't have enough available inventory capacity to offtake and that then the physical reality of oil, and having to deal with the sort of black viscous liquid that you need to put somewhere could conceivably take prices negative, particularly at the extremes of the chain, for example in Canada or maybe in North Dakota where you're further away from markets. ... In my role as an analyst we've been trying to put pressure on Saudi, to be honest, because I think that adding oil in this market isn't really what's needed, to say the least. And that may recover things so we've been doing some fairly doomsday-type scenarios of what Q2 looks like if Saudi keeps pumping and if we continue to have a rolling shutdown of the United States of America, which is the biggest oil market in the world. At that point, you get to very low prices."
Harold Hamm, founder of Continental Resources, says he has faith in the federal agencies tasked with stabilizing markets.
"The good thing about this situation as we just talked about is that we have an agency that is charged with protecting American interests such as this. So, that's a good thing we have a Secretary of Commerce that understands and can deal with this quickly. And we talk with him. Obviously, with the Armed Services Committee moving forward to take charge here, and also the Commerce Committee and the Senate, they can move very, very quickly and stop this situation has been imposed on us."