Whilst the US equity market saw moderate weak chop across the day, there was notable weakness in the energy market. WTIC Oil saw a net daily decline of -$1.03 (2.8%) to $36.34. Declining resistance is now around the $40 threshold, and Oil still looks on track for new multi-decade lows this year.
The broader situation remains entirely unchanged. Demand remains somewhat weak, whilst the bigger issue is one of over-supply. Despite periodic chatter and various rumours, there is zero progress being made to halt the increase in supply.. never mind actual production cuts!
So... I would expect the recent low of $26.05 to be broken under within the next few months.. with WTIC Oil eventually falling into the teens.
To me, its not so much if we'll see the teens, but for how long might oil reside within the $15/25 zone? If its longer than a month or two, there are all sorts of grander implications for the energy sector.. and the broader economy.
Wed' will see CPI, housing starts, indust' prod', and the latest EIA report.
The FOMC will issue a press release at 2pm, with Yellen set to hold a press conf' at 2.30pm.. and that will likely last around an hour.
Goodnight from London