Bill O'Neill, founder, Logic Advisers offers his perspectives on CNBC-TV18 as oil surged on Friday in heavy trading to the fourth biggest daily gain on record, on a deal by European leaders to shore up euro zone banks triggered frantic short-covering by funds that had been riding crude's price collapse over the last quarter.
Brent crude oil futures rose more than USD 6 a barrel to near USD 98 while US crude jumped by more than USD 7 to settle just below USD 85 a barrel - the fourth largest daily gain in dollar terms since the contracts were launched.
Below is an edited transcript of the analysis. Also watch the accompanying view.
Q: What do you make of the increase in crude prices today?
A: This is one of those knee-jerk days when everybody dives into the pool at the same time. Also remember there are a lot of short positions that some of market-traders are overcommitted to. So when the European news came out, it was definitely a surprise.
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