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Oil reprice rebounds after plunge on output hike news, stocks up amid volatile week

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Yahoo Finance's Jared Blikre provides an analysis on market and crude oil rebounds following a plunge.

Video transcript

ZACK GUZMAN: But first, I want to spotlight what I said there about the moves in oil, Akiko, as we have been counting down the days, the minutes, to that OPEC Plus meeting around what they would do in response to the release of strategic oil reserves here in the US and alongside our allies. And Russia pushing to stick to the production hikes, though there is a get out clause that I think is worth highlighting here.

And for more on that, I want to bring on Yahoo Finance's Jared Blikre, who's been watching the wobbles in the oil market today. And Jared, we did see prices dip when we first heard about, I guess, kind of the agreement here to increase production. But tell me more about what we're hearing when it comes to how impactful it is.

JARED BLIKRE: Sure thing. So expectations had built up a little bit that OPEC might decide not to increase production because oil, crude oil, WTI, is off about 25% peak to valley, although it has recovered some of those, pared some of those losses. Now, I want to go to the YFi Interactive, where we can see WTI is up 1 and 1/2% for the day. And let me actually-- excuse me here a second. I have the wrong machine open. So just give me two seconds here.

All right, so WTI crude oil is up 1 and 1/2% for the day. Now, OPEC Plus is going to meet again in another month, but as you said, Zack, they could leave the door open for another price-- excuse me, another production either halt or increase. They're pretty flexible on this. And that's kind of a surprise because market participants really thought that they were going to either stay the plan or really not leave the door open.

So here, we have the intraday price action. We can see we did get that spike down on the news, getting that extra supply. But if you take a look at a year-to-date chart of crude oil, you can see we're back to a pretty important level. We hit a level in the low 60s, about $63 per barrel. That's something that we've hit before earlier in the year several times. So, not surprisingly, I think we're bouncing. I don't know how far this is going to go. I'd watch the $70 to $75 price area in here. But nevertheless, crude oil front and center on market participants' minds.

Now I want to get to the major indices here. The Dow is recovering some of the losses from yesterday. This is a one-day chart. I'm going to pull a two-day chart up. And you can see really still in the middle of the range of the high to the low. S&P 500 has hit a critical level. And I'm going to put a two-year chart so I can draw a trend line that a lot of traders are watching here. So this goes all the way back to October of 2020. And if you draw a trend line-- and you'll have to forgive my drawing here-- we are right at that threshold. So if we were to break down, probably going to see some further momentum to the downside. And we're going to definitely want to keep an eye on that.

Here is the VIX, and I'm going to dial this back down to a two-month chart. You can see the last several sessions have been very volatile. This first spike up that was last Friday, we all remember what happened then. When you take a look at what's happened over the last year, you can see this spike is now greater than the ones that we had in September and the ones we had in May to June and also the March one. So only at the beginning of the year, when we had that incredible rally in the beginning that was culminated with the meme stock trade and then crashed, only that spike was bigger. So definitely a pick-up in volatility.

And also picking up in volatility is the yield situation. I'm going to dial this back down to a one-month chart. But yields, which had been volatile previously-- this is the big drop from Wednesday to Friday that we got there-- they've kind of consolidated here. And so all of the action in the bond market I think is centering around what the Fed is going to do and that calculus. As soon as I-- let's do one heat map here. I do want to point out the software sector, which is really jumping today. We got Snowflake up 13% and Crowdstrike up 3% after earnings. So some decent gains there, guys.

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