(Oil prices article updated with additional analyst commentary.)
NEW YORK (TheStreet) -- Oil prices bounced back Thursday as markets reacted to further progress on Europe's debt crisis -- a move that oil traders described as "naïve."
West Texas Intermediate (WTI) light sweet crude oil for November delivery was popping $1.54 to $82.75 a barrel and December Brent crude futures were 86 cents higher at $103.42.
The U.S. dollar was down 0.3% to $77.83.
"How many times have we seen this eurozone optimism crushed within a matter of days? I have no reason to believe that this time will be any different," says Kingsview Financial trader Matthew Zeman.TAC Energy trader Mark Anderle agrees, and describes the European bailout drama as the "euro yo-yo" that is "driving everything," right now. Like many traders, Zeman isn't buying into today's market rally, and "skepticism" would be the way to describe the way they're feeling about the headline news out of Europe. He, for one, believes that a default in the eurozone in inevitable -- though an orderly default could provide longer-term relief to the markets. "Either way, the economic recovery is not shaping up in the way the Fed had hoped, and even a Greek solution or default cannot stop the domino effect at this point. I believe we are in a bear market and significantly rallies will be faded by professionals." The trader sees oil hitting key resistance levels at $83 to $84. A two-day religious holiday that resulted in thin-trading volume Thursday helped magnify the the markets' excited reaction to the approval by the German parliament to extend the European bailout fund. Better-than-expected U.S. jobless claims, gross domestic product and personal consumption numbers took the markets even higher. But "just because jobless claims are under 400,000 -- doesn't mean it'll stay that way, Zeman added. "I think market is being short sighted." Summit Energy analyst Matt Smith expects oil prices to remain "undecided, volatile and swayed by moves in equities and the dollar," as long as market continue to be forced into reading headline news about Europe and the global economic uncertainty. GRZ Energy trader Anthony Grisanti will continue to follow the equity markets for clues on where the oil markets are going. Positive news for equities, he says, will be taken as positive news for oil, while bad news for equities will be interpreted as bad news for oil. Energy stocks were trading mixed. EOG Resources (EOG) was falling 1.4% to $73.26; Suncor Energy (SU) was rising 1% to $26.45; Triangle Petroleum (TPLM) was popping 1.8% to $3.87; Transocean (RIG) was losing 0.8% to $50.11; BP (BP) was adding 1.9% to $37.13; Chesapeake (CHK) was surrendering 2.3% to $26.57; and Rex Energy (REXX) was tumbling 2.2% to $13.33. -- Written by Andrea Tse in New York.
>To contact the writer of this article, click here: Andrea Tse.
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