Since July, every time crude oil gets a bid there is some news to squash the rally. This time the People's Bank of China (PBOC), in a surprise move, devalued its currency causing its biggest one day sell-off in almost 20 years. The move, they say, is so they can move towards a more "market-driven" currency but many feel the move was in response to weak China export data. The Wall Street Journal says that the devaluation was the most significant downward adjustment to the Yuan since 1994, when as part of a break from Communist state planning, Beijing let the currency fall by one-third.
What is more, it is raising fears that the slowdown in China is accelerating and the Chinese government is panicking. While the hope of more exports might inspire thoughts of more commodity demand, the strength in the dollar might offset those gains.
It also is raising fears that it could start off a round of competitive devaluations in other countries and that is giving gold a boost as holders of those currencies look for a store of value before their currencies lose value. Copper on the other hand gave back a big part of its gains on fears that China is slowing.
A new report is showing that OPEC oil output is at a 3-year high as Iran raises its production to the highest levels since 2012. It seems someone is getting ready to sell some oil. OPEC raised its output by 100,700 barrels a day to 31.5 million last month. Iran oil output increased by 32.000 to 2.86 million barrels per day as it seems they are getting ready to sell oil on the global market.
Just when you thought it was safe to go to the gas pump, a refiner glitch in Indiana is going to cause a price spike in Midwest gas prices. Bloomberg News reported that gasoline futures rose for the first time in four days after BP Whiting refinery south of Chicago shut their biggest crude unit, serving the Midwest, for unscheduled repairs. The 240,000-barrels-per-day crude distillation unit at BP's Whiting, Indiana refinery sent gasoline prices soaring more than 4%.