Crude oil prices led stocks lower yesterday, but today are rebounding. There’s talk of lower U.S. output, stronger than expected demand in Asia and short covering ahead of the weekly inventory reports.
Crude oil prices were under pressure after Mario Draghi magic seemed too eased off. Oh, sure, after Mario Draghi said he was disappointed with growth and the lack of inflation, oil got a bounce. Yet, when Asian and European stocks gave up the gains, oil prices falter until a headline came out about those Chinese Military ships that are moving off of the coast of Alaska.
Canadian natural gas prices have held up so well that the majors are taking strategic positions to prepare for an eventual demand spike. But the paydays could be delayed depending on the outcome of the Canadian federal election on Oct. 19.
Crude oil prices are still under pressure after a volatile Chinese stock market trade and a big miss by BP. BP reported a loss of $5.8 billion dollars in the second quarter as oil prices plummeted and lost revenue.
With the recently concluded nuclear deal between Iran and the P5+1 countries, oil prices have already started heading downward on sentiments that Iran's crude oil supply would further contribute to the already rising global supply glut. The economic crisis in Greece, OPEC's high production levels and China's market turmoil have created more pressure on oil prices, making a price rebound lookhighly unlikely in the near future.
Crude oil prices have been in a selling mode for most of this week on a combination of the evolving situation in Greece, a sell-off in Chinese equities and the growing possibility of an Iranian nuclear deal. All three areas can potentially lead to the current oversupply of oil growing even further.