Disappointing US economic data put oil prices under pressure

Weak US economic data such as a sharp fall in consumer confidence were the final straw, as this makes for a much gloomier outlook as regards oil demand in the most important oil consumer country. 

In view of the negative market sentiment at present, however, oil prices at the front end of the forward curve have also come under pressure because speculative financial investors are taking this opportunity to jettison further long positions. 

"The expectation of further rises in US crude oil stocks is likewise weighing on prices. According to the API, US crude oil stocks last week climbed further by a good 4 million barrels", says Commerzbank. 

The US DOE will be publishing the official inventory data this afternoon, a sizeable inventory build is likely there too. A considerable decline in US crude oil production would therefore be needed to turn around the negative sentiment on the oil market.