Crude oil futures for delivery in March 15 [CLH15.NYM] surged 4.05% on Friday to an intraday high of U.S. $53.43 per barrel and closed at U.S. $52.65 per barrel on the New York Mercantile Exchange (NYMEX) after the leaders of Russia, Ukraine, France and Germany reached a ceasefire deal for the year-long Ukrainian conflict. 

Although the crude oil price was only up 0.63% for the week, the price has gyrated throughout the week as the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) were sending out mixed messages regarding crude oil production and demand. 

OPEC said on Monday that OPEC oil production will increase by 430,000 million barrels per day (bpd) from its previous forecast to 29.21 million bpd in 2015, as non-OPEC countries begin to cut their capital expenditures and production. 

The IEA came out and warned on Tuesday that the oil inventories of non-OPEC countries may approach a record 2.83 billion barrels by mid-2015 before cuts in capital expenditures begin to have a significant impact on production. The IEA also said that its forecast of global oil demand growth for 2015 is unchanged from last month's report, at 0.9 million bpd, bringing average demand for the year to 93.4 million bpd.

On Friday, Baker Hughes [NYSE:BHI], one of the world's largest oilfield services companies, issued its weekly report saying that the U.S. oil drilling rig count fell again to 1,056 in the week ending February 13, down over 34% from the record highs of 1,609 set in October 2014. For reference, the U.S. oil drilling rig count stood between 200 and 400 during the financial crisis in 2009. 

The Crude Oil Volatility Index (OVX), traded on the Chicago Board Options Exchange (CBOE), tumbled 5.38% to close at 55.53 on Friday. The OVX was down 8.71% for the week and is now back below the 58.43 technical resistance level, or ~ 50% Fibonacci retracement. There are near-term technical supports at 53.46, or 50-day SMA and 48.16, or 38.2% Fibonacci retracement. Since the OVX up-trend is still intact, the OVX can bounce off these two technical resistances.

The OVX is a crude oil derivative which measures the market’s expectation of 30-day volatility of the United States Oil Fund ETF [NYSE:USO], primarily the near month WTI crude oil futures contracts traded on the NYMEX. In short, high OVX readings usually mean traders see significant risks that crude oil price futures will move sharply lower.

The 10-year U.S. Treasury yield tumbled 3.59% for the week and closed at 2.02%, just above the 50-day SMA at 2.01%. The relationship between the U.S. Treasury yield and crude oil prices follows a general rule that crude oil prices move in the same direction as inflation, measured by the All Items Consumer Price Index or CPI-U. As the crude oil prices move up, inflation and U.S. Treasury yield follow in the same direction. 

During the past several weeks, hedge funds could have been covering their crude oil short positions and selling U.S. Treasuries. There are near-term technical resistances for the 10-year U.S. Treasury yield at 2.04% or 61.8% Fibonacci retracement and 2.15%. Economic uncertainties in the Eurozone and some of the recent U.S. economic data suggest that these resistances might hold.

The Bureau of Economic Analysis, the U.S. Commerce Department, said on Thursday that the core retail sales excluding automobiles, gasoline, building materials and food services rose only 0.1% in January. According to Reuters, Barclays is trimming its first-quarter U.S. GDP growth estimate from 2.5% to 2.2% while J.P. Morgan cut its estimate from 3% to 2.5%. Thus far, the bond markets seemed to shrug off this news.

The euro-dollar exchange rate surged 0.8% for the week to close at 1.1394 dollars per euro. The major technical head resistance for the euro-dollar exchange rate is 1.15 dollars per euro, where the forex traders are expected to step in and short the euro-dollar.

The odds that the 1.15 dollars per euro resistance will be broken is slim as Greece’s left-wing government is still negotiating with its creditors. The Greek government and Greek banks could be running out of money as early as next month if no agreement between Greece and the ECB can be reached.

ECB President Mario Draghi’s quantitative easing (QE), set to begin next month, is still facing some legal and political hurdles, largely from Germany. In theory, it is still possible that the German Federal Constitutional Court in Karlruhe could instruct the German Bundesbank not to cooperate with the ECB bond-purchasing program. 

QE may help boost the Eurozone’s economy in the short term. Nonetheless, the long-term effectiveness of such a program remains to be seen at this point. Some hedge funds do not seem to think highly about the success of Mr. Darghi’s QE and are anticipating the euro to be in parity with the U.S. dollar by the end of this year, or in early 2016.