Crude oil prices are showing signs of breaking out to the upside as U.S. oil production falls for the second month in a row despite the following: expectations for an increase, OPEC record compliance to oil production cuts and because of a harder line on Iran by the Trump Administration.
Before the election, there were dire predictions about a Donald Trump presidency may mean for the US stock market, with some prognosticators calling for a -7% (seven sigma!) drop on the first day. Those grim forecasts appeared on point on election night, when U.S. markets were halted limit down (-5%) at one point overnight.
The UK inflation figures were stronger than anticipated, with headline CPI rising at a 0.6% rate rather than 0.5% that had been widely expected. The impact of Brexit was very clear as a significantly weaker pound caused the price of goods and raw materials purchased by manufacturers to soar. The 3.3% month-over-month jump in PPI input was much stronger than 0.6% expected, but it looks like most of the costs were absorbed by manufacturers as factory gate prices only rose 0.3% on the month.
Crude oil prices are at a critical juncture after the U.S. dollar hit a one-month high against the euro and a 12-year high against the yen as traders looked for safe haven on fears that Greece might default and on worries that the Fed might be closer to raising interest rates.