The crude oil market traded lower during the overnight hours and registered a new low for the decline. The market has been able to rebound during the initial morning hours, helped by a bounce in European equity markets and pullback in the US dollar. This rebound comes in the face of a downgrade on a number of Spanish banks, as well as a downgrade on Greece's credit rating. Some traders suggested that the early morning reversal action could be a sign that the downside action might have come too far too fast. Another near term positive for the crude oil market appears to be the Seaway pipeline reversal, which is expected to begin taking record supply from Cushing down to the Gulf coast. Perhaps this helps explains weakness in Brent relative to WTI crude oil. The crude oil market will likely pay attention to headlines from today's start to the G-8 meeting, especially for clues on further sanctioning against Iran and any potential SPR release.
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