The price of oil is seesawing like crazy

The price of oil is popping on Wednesday, passing above the $40 mark for the second time this week, in a particularly volatile few days of trading.

Just after 10:35 a.m. GMT (5:30 a.m. ET) both major crude benchmarks are up by more than 1%, with European Brent oil trading at $40.32, up by 1.69%. Earlier, it hit a daily high of $40.34.

West Texas Intermediate crude, the mark used by US traders, is up by a similar amount, but is trading just over $37, up 1.42% to $37.02. Here's how both benchmarks look over the last couple of days:

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Up and down like a yo-yo

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These increases wipe out some of the big losses seen on Tuesday, as the price of oil seesaws wildly between big gains, and big falls on an almost day to day basis.

On Monday, oil jumped above the $40 mark for the first time in 2016, leading many traders to speculate that oil may finally be heading back towards some sort of stability, and relatively high price levels. Crude has gained around $10 in value since mid-February, but big daily swings haven't been uncommon.

That can be seen in how high the CBOE Oil volatility index is right now. The index tracks swings in the cost of oil, and although it has fallen since early February, it is still at some of its highest levels since early 2015, when the oil price crunch was just starting to hit markets. Volatility has increased in the last couple of days, with the index growing 2.35% during trading yesterday. Here's how CBOE's index has performed since 2014:

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This volatility points to the fact that oil isn't actually steadying in the long-term, and that this current series of gains is simply a minor blip in an environment where prices will remain depressed for a long while yet. That view is taken by several major banks, including Barclays and Swiss private bank Julius Baer. Goldman Sachs also believes that the current rally in the commodity sector at large will not last long term.