No Doha Deal? No Problem for Oil

The news over the weekend that no deal could be reached in Doha to cut the global production of oil may have caused some investors to worry. But, if the last two days are any indication, they've quickly gotten over it.

Crude oil futures are up two points since they opened this week, and some of the biggest oil stocks are catching bids as well. Chevron Corporation CVX, Halliburton Company HAL and Exxon Mobil Corporation XOM all broke through resistance levels on Monday, and continued to trade up with the rest of the market on Tuesday.

Tuesday's Oil Rally

PreMarket Prep hosts Joel Elconin and Dennis Dick discussed oil's rally on Tuesday's show. Said Dick, "Ignoring everything else you hear in the media, the trading action tells you that these oil stocks seem to want to go higher. When they don't go down on bad news, and they buy them right in your face, it makes me think that the bottom maybe was in."

Related Link: Morgan Stanley At Dubai Analyst Conference: Oil Stuck In $25–$45 Range

Dick said he thinks oil could hit $50 before it falls down to $30 again, "unless something crazy changes in the world."

"A lot of times things are just trading technically. Everybody's looking [at] yesterday [asking], 'Why the rally? Why the rally?' You want to know why the rally? Because everyone thinks it's going down. When everyone gets caught on one side like that it's going to push it higher."

Elconin noted that the June, July and September, crude contracts were all trading in the $41–$44 range, above its current price. The exact opposite from when oil was tanking.

Furthermore, when oil was tanking, the exact opposite occurred in the future contracts.

PreMarket Prep is Benzinga's morning show for traders and investors. It airs live with live chat feature here from 8–9:30 a.m. ET, and is posted as a podcast here.