Crude Oil - Stock Market Decline Pulls Down on Crude Oil Prices

A disconnect between oil prices and the US dollar were felt by investors yesterday. The greenback came tumbling down after a bearish report on the Federal budget balance was released, but oil prices also fell around $3 a barrel yesterday as speculators assessed weakness in the black gold's recent bullish run.

The most pressing concern in the commodities market lately has been a fear that the global economy cannot sustain sufficient growth with oil prices reaching above $100 a barrel. Investors witnessed the price of oil drop from as high as $113 last week to around $106.50 this morning. Adding into this downturn was a weakness in raw material prices seen over the last two trading days that inflicted pain on the stock market yesterday as commodity-linked companies felt losses as a result of the decline.

At the moment, little news appears to be sufficient to bring oil prices back higher, though a turn-around in the global stock market could help fuel the growth needed to bring oil prices back into a bullish posture. Traders will want to watch the global equity markets to get a feel for where oil prices may go in the days ahead.