Crude oil prices are proving to be resilient after wiping out a 2% loss to close over 2% higher. Not even a reported 4.7 million increase in crude supply and reports that President Obama has the votes to overcome a veto on his deal to lift sanction on Iran was not enough to keep this market down.
Crude oil prices fell below $40 a barrel signaling that not all is well with the global economy. In a global equity market rout, fear trading has taken hold as traders run to the safe haven of bonds and run from just about everything else.
One day after shocking the globe by devaluing its currency, the Chinese government is now trying to tell us not to worry; that the move is not a sustained devaluation even after China's Central Bank for the second day in a row cut the guiding rate for the Yuan.
Crude oil is trading on very important historical support as the market tries to find support at $44 a barrel. For oil to go much below these price levels and stay there we would have be in a new paradigm, because according to research by Dave Boyce at Dixie-Industrial, it is a level that oil has been in only 3% of the time in the last 10 years.
Crude oil prices ended their worst month since the 2008 financial crisis after 3 events in a row knocked oil and other commodities for a loop. Those three events in order are Greece, Iran and China; and while I guess you can't call them "black swan" events, the timing of all three colliding at the same time led to the oil markets July swan song.