Yesterday's Oil Spike: More Than Meets the Eye

Kind of like Transformers, yesterday's big spike in oil wasn't exactly what it seemed to be. In short, yesterday was the expiration of monthly oil contracts and it appears that traders decided to go after some players that were short going into expiration. The result was that you had a big pop as the short sellers rushed to cover and some people went long to try and play the big move.

It was funny to me that most media outlets didn't seem to pick up on this. Up to the end of the day, the AP articles on Yahoo!Finance were still saying that oil was getting bid up as a result of the $700 billion financial bailout plan. I have to give props to CNBC, though, because they were all over it -- probably one of the few useful things I've gotten from watching that manic channel.

Basically that's it, not much need for further explanation. Today, a quick check over at the Nymex shows that now that the new contracts are trading, we've got crude back at under $107 per barrel.

-AvgJoe