“The market turned around on two pieces of news,” Phil Flynn, senior market analyst for Price Futures Group Inc. in Chicago, said by phone. "The EIA cut its U.S. output estimates and OPEC says its ready to talk to others about cutting output."

Eoin Treacy's view

$40 represents an important psychological Rubicon for crude oil prices. Last week’s upside weekly key reversal and upside follow through this week suggest a low of at least near-term significant. A clear downward dynamic would now be required to question current scope for additional mean reversion.

The S&P500 Energy Index is deeply oversold relative to the trend mean and potential for a reversionary rally is increasing. Beyond that, a sustained move above the 200-day MA will be required to signal a return to demand dominance beyond short-term steadying.