Crude futures pulled back today as investors rushed to lock in profits after last week's ascension to unseen highs. John Kilduff, analyst at MF Global noted that the market remains vulnerable, thanks to last week's grossly overbought condition. In a note to clients, Kilduff noted that fresh storm threats on the distant horizon, new attack threats against Nigerian oil facilities, Iran's bellicosity, and continued dollar weakness have all failed to spark any significant buying. Last week's storm threats continued to wane, allowing production to continue to increase, as just 19.3% of the Gulf of Mexico was still shut-in as of yesterday, up from 63% on Friday. Investors are now looking to tomorrow's inventory figures, which could push black gold higher if there is a larger-than-expected loss than the estimates of a drop of 2.1 million barrels.
Against this backdrop, November dated crude slipped $1.42 to finish at $79.53 per barrel. Another reason for the decline in crude prices was concerns that the economy can slow down, causing some investors to take profits off the table. The CBOE Oil Index (OIX) was last down 1.26% and the AMEX Oil Service HOLDRS Trust (OIH) slipped 1.4%.