The October contract has risen 5.25 off their lows from the 1st. This is not that unusual. As noted all last week, the market often does not like to the August expire and the next contract out hold such a steep discount to current cash prices. We can argue all we want that this discount is needed, and may, in fact, be too small based on the supply change coming, but that does not matter. From a simple optics perspective, a $20 discount is too much.
After crude oil failed to complete the comeback yesterday, sellers are at it again using the return of Libyan oil and weak Chinese data as the reason for the selling. Libya’s State-run oil company is claiming that it can raise production to 8000,000 barrels a day, which could raise exports that on average are now running about 500,000 barrels a day.
China says its Silk Road initiative is helping create "a new era of globalization" open to all, according to a draft communique for a summit next month on the project, as Beijing burnishes its free trade credentials amid protectionist forces elsewhere.