Crude oil traders are finding out that at least right now, the U.S. Dollar is stronger than Tropical Depression Number 9. Oil started out higher on Tuesday and really reversed course after the Consumer Confidence number blew away expectations, hitting 101.1 in August way above 97.0 expected, which caused a surge in the dollar and a reversal in oil.
Although The National Hurricane Center says that Tropical Depression Nine is expected to strengthen soon, it is already impacting oil and gas production. The Bureau of Safety and Environmental Enforcement (BSEE) says that tropical depression nine in the Gulf of Mexico is causing precautionary shut-downs of offshore oil and gas operations that are in the path of the storm.
Crude oil traders not only have to grapple with the aftermath of Fed Chair Janet Yellen, but also with more storms that could impact both supply and demand. This comes after hedge funds, who started the month with a record short position, have now turn around into a record long position.
Crude oil and natural gas will be looking to deal, not only with watching the weather but also watching Fed Chair Janet Yellen in Jackson Hole, Wyoming. This as the market saw movements from the Saudi Oil Minister and trying to measure the risk of fallout from increasing tensions with the U.S. and Iranian military.
Crude oil prices slipped on Thursday as the market focused on oversupply and fading expectation of a production freeze. Global crude oil benchmark Brent was down 10 cents at $48.95 a barrel by 1230 GMT, having closed down 1.8 percent on Wednesday. U.S. light crude oil was down 15 cents at $46.62 a barrel, after dropping 2.8% on Wednesday.
European stocks saw their biggest fall in three weeks on Thursday and currency markets were noticeably subdued as investors took to sidelines ahead of one of the big global central banker gatherings of the year.
The National Hurricane Center is warning that interests in the northwestern Bahamas and Florida should monitor the progress of a tropical wave disturbance known as Invest 99-L, and already there are signs in the oil market that oil companies are heeding the warning.