The psychology of the market has radically changed recently. All of the good economic news last week and the oil leak in the Gulf seemed to indicate that prices would go even higher perhaps to $90. Yesterday, the riots in Greece broke out and the euro began to fall again as the problems in Portugal, Spain and Italy are also under greater scrutiny. This has caused the dollar to rise and thus commodities fall as investors run to the dollar.
The size of the two day fall is also about the continuing increase of crude supply despite positive economic indicators. Crude has fallen the equivalent of 15 cents a gallon the past two days while gasoline has fallen 21 cents because of a significant build in inventory when a modest draw was expected. Refinery utilization rates have also increased to 89.6%. No one talked about contango today as so many had bought into an improving demand picture but there's considerable doubt about that now.
Today, crude -$2.76, $79.87, gasoline -9.71 cents, $2.2238, distillate -7.64 cents, $2.1827.
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