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The rollercoaster ride continues for energy and stock markets as one of the largest daily reversals in equity markets on record Thursday spilled over into oil and refined product markets overnight, only to see those gains wiped out this morning.

The post-Christmas bounce for both asset classes may very well set the stage for a longer-term recovery, although we’ll need to see buyers hang on for the last couple of trading days in 2018 to have a chance at sustaining this rally. The correlations between Equity and Oil prices have surged in the past two weeks, which has been typical whenever the “risk on-risk off” pattern of trading (also known as “fear trading”) is gripping markets.

The API was said to show a 6.9 million barrel build in US Oil inventories last week, a 3.7 million barrel build in gasoline, while diesel stocks declined by nearly 600,000 barrels. The report knocked some of the wind out of the afternoon equity-fueled rally, although it’s hard to say if that report influenced the overnight swings of more than $1 for crude and 3-4 cents for products. The DOE’s weekly report is due out at 11am Eastern today.

While gasoline prices have led the way lower for much of the 3-month sell-off, reaching their lowest since February 2016 during the Christmas-eve melt-down, diesel prices led the drop Thursday. Gulf Coast ULSD prices settled at $1.56/gallon, the first time since Hurricane Harvey we’ve seen wholesale diesel prices posted that low.

The bulls said no yesterday as the big three petroleum futures bought back all that was lost on Christmas Eve. On twice the traded volume as Monday, refined products popped between 4% and 6% this Boxing Day while crude added a whopping 8% with a gain of $3.50 per barrel.

On the physical side of things, since most benchmarks didn’t publish prices on Monday, buyers and sellers of wet gallons were looking at the net change between the 24th and 26th, which had gasoline gaining a relatively dull 1.2 cents while diesel remained flat .

Christmas Eve was not kind to energy prices Monday as the big three American benchmarks lost 4-6% on light volume. Gas and diesel futures lost over 6 and 7 cents respectively while the prompt month crude oil contract cut almost $3 off of Friday’s price.

The CFTC reported that short speculative positions have hit an annual high with the money manager classification of trader opening 20,000 outright short positions as of 12/18. While it may not necessarily indicate future price direction, it is important to note that bets on lower prices have not been this high since last October.

Premiums over Colonial Pipeline tariffs remain elevated going into the new year as traders vie to take advantage of favorable cash price differences from the origins along the gulf coast and the sundry delivery points up the eastern seaboard. Values for both the gasoline and diesel lines remain at levels not seen since 2016.

The charts are having a hard time offering any bullish sentiment as prices burned through flimsy support to levels not seen since early 2016. A bounce-back today could make a case for some level of overselling Monday. Currently, only the January ULSD contract is staying in the red so far today, but only just. RBOB is tacking on 1.5 cents as WTI tempts cutting Monday’s losses by a third by adding $1 today.