Crude Rallies As Rig Count Falls, Volatility Surges (Investor's Business Daily)

Crude oil capped the biggest two-week rally in 17 years on speculation that a falling rig count will curb U.S. production growth. Price volatility rose to the highest in almost six years.
Brent crude jumped 18% in the past 10 trading days, the most since March 1998. A volatility index gauging price fluctuations in West Texas intermediate crude rose last week to the highest level since 2009.
Oil has rebounded as companies including Statoil ASA, BP and Royal Dutch Shell have reduced investments in response to the market’s collapse. U.S. drillers pulled more rigs off oilfields, according to data from Baker Hughes Friday. Saudi Arabia cut prices for March exports to Asia to the lowest in at least 14 years, signaling OPEC’s largest producer may continue to fight for market share.
“We are establishing a bottom,” said Bill O’Grady, chief market strategist at St. Louis-based Confluence Investment Management, which oversees $2.4 billion. “In the long run, probably $60 is going to be your pivot point. Usually you have high volatility when there is a disagreement on where the price should be.”
Brent for March settlement increased $1.23, or 2.2%, to $57.80 a barrel on the London-based ICE Futures Europe exchange, up 9.1% this week. Even after the recent rally, Brent has still fallen about 50% from its June 19 high of $115.71.
West Texas intermediate for March delivery climbed $1.21, or 2.4%, to $51.69 a barrel, up 7.2% from last week.