Your Monday Market Blip 12/14/15

Your Monday Market Blip 12/14/15

Stocks today rebounded on heavy volume from last Friday’s selloff. The Dow closed the books on Monday with a 103 point gain to 17,368. While the markets are considered in a “correction” by IBD, they appear to be finding support at current levels. Early this morning after trading opened the Dow fell over 100 points before starting to rally and closing at the day’s highs.
This week will host the most watched Fed policy meeting since the Pleistocene epoch. Odds makers are giving a better than 7 in 10 chance that the feds will increase rates when they make the announcement this Wednesday. Low interest rates could be headed the way of the dinosauer.
The Paris based International Energy Agency or IEA, issued its latest projections for growth in global oil demand. The report indicates that demand growth will slow to 1.3 million barrels a day this quarter down from a peak of 2.2 million bpd last quarter. For 2016 they are forecasting demand growth at 1.2 million bpd. This figure is less than what Saudi Arabia is forecasting and indicates that low prices will not boost demand as some have predicted. Meanwhile in the US of A the latest Baker Hughes rig count fell by 21 and now sits at 524. The rig count had peaked at 1,609 in October 2014. Analyst in the US think that oil needs to be in the $40 to $50 per barrel range in order to make drilling new wells pay but these same guys also think that existing wells can operate profitably with oil at $30 per barrel.
WTI crude oil opened lower but then rebounded and closed the day up about 2% at $36.32. Earlier in the day oil had traded below $36 and appeared headed for the 2008 low of $32 a barrel. The gurus are expecting global oil supply to increase by about one million barrels per day in 2016 as Iran might add 700,000 barrels per day with the rest coming from Russia, Iraq and Saudi Arabia.