The big story in global markets today is yet another leg lower in oil prices. WTI oil was testing key support in the 75.00-76.00 zone, while the Brent contract was pressing against key psychological support at 80.00 ahead of today’s crude oil inventory data.
Crude oil prices are extending their recent collapse heading into today’s U.S. session. The primary factors driving oil lower are the same ones your Economics 101 teacher droned on about during the first week of class: high supply (from Saudi Arabia increasing production) and low demand (from slowing economic growth in the Eurozone and China).
Last week, the Norway’s Norges Bank left interest rates unchanged at 1.5%, and pushed back its timeline for an interest rate hike to the end of next year (vs. the middle of the year previously), even indicating that it may have to cut interest rates to revive economic growth.
Price swings in the dollar against the yen measured by options fell to a record as signs of an uneven U.S. economic recovery fueled bets the Federal Reserve will keep borrowing costs at unprecedented lows.