Tough to square the market enthusiasm with oil

WTI crude oil futures settled 33-cents lower to $74.04 after falling as low as $73.50.

It’s the third day of losses and fifth in the past six days and also runs counter to growing optimism about the US and global economy, particularly in stock markets.

Then again, it’s tough to say which is the chicken and the egg. Yields are falling this week and that may be helped out by oil, which is going to be a drag on CPI in the very near future, given that last Sept-Oct prices ranged from $85-95.

The drop in oil lately has oil analysts scratching their heads given falling OPEC exports and draws in global inventories. A report at the start of the week also talked about consumption vouchers in China and larger borrowing limits, both of which could stimulate the struggling economy.

This article was written by Adam Button at www.forexlive.com.