Crude oil prices are under pressure again as global growth fears seem to outweigh oil production cutbacks. Weak industrial profits in China and the International Monetary potentially lowering its growth forecast.
The day after crude oil prices rose almost 5% the dogma of the dollar versus oil inverse relationship has come to a screeching halt ahead of the most exciting FOMC meetings in a decade. As the Fed moves closer to raising interest rates and getting closer to a normalization of interest rate policy the correlation between the dollar and oil is breaking down.
The Federal Reserve takes out its reference to "stabilizing oil prices" and the Saudi's are dropping hints of an oil production cut. This comes as U.S. oil production sputters and inventories falls. We may have just hit a bottom as crude oil companies quickly react and probably overreact regarding July's oil price crash.
The star player today may indeed be European Central Bank chief Mario Draghi as he has teased the market about moving to a form of Quantitative Easing yet few believe that he will actually go there today.