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This is not the best way to market for the oil market.
For a sense of perspective, July 2016 was a couple of months ago before a meeting of OPEC, Russia and other producers to cut output. At that point, the market was deeply skeptical that OPEC would reach a deal to tackle oversupply. Saudi Arabia was pumping at then-record levels, and U.S. drillers were adding rigs to American oil fields.
There is one similarity between 2016 and 2018: The oil market has been strong in the first half of the year before hitting a volatile patch in the second half.
There is little doubt that much of the oil market is in the hands of investors. Both stocks markets and crude futures jumped in early October before selling off sharply.
"The correlation has been about 80 percent over the course of the month" between equities and crude, said John Kilduff, founding partner at energy hedge fund Again Capital. "This is the highest correlation I've seen in quite some time."
Both the equity and the gross markets are being slowed down by global economic growth, rising U.S. interest rates and worries over a prolonged trade dispute between the United States and China. A stronger U.S. dollar is also buffeting oil, Kilduff said.
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