WTI crude oil touched a fresh high since 2008 today at $123.68 but has since turned around in rapid fashion and trading at $118.67.
Headlines have been mixed. Libya reported lower production than expected.
The 16% slump in natural gas came after Freeport LNG reported it could take months to get production fully back online. That will mean more gas-to-oil switching for power generation in Europe and Asia.
The economic side is where the trouble starts as a recession would undermine demand. With Biden visiting Saudi Arabia next month, there's also growing speculation that the Kingdom will announce higher production for Sept or beyond.
We get the latest API private inventory data shortly after the US equity close and EIA US official inventories are due tomorrow. Crude has risen in 7 straight weeks so a more-sustained decline certainly wouldn't be out of the ordinary. In the shorter term, the area around $117 to $117.50 has held in the past two weeks.
