The rally in crude oil has stalled for now. There were fears that a squeeze was developing around the expiring August WTI futures contract, but it did not materialize. In fact, the contract weakened materially, in relation to the term-structure and flipped into a discount to September from the strong premium that had developed. The balance of the curve remains backwardated, but the expiration of August was a bust for the hopeful bulls. The weekly inventory report will generate another round of volatility on Wednesday, as another drawdown of crude oil inventories is expected.
Energy Overview — TotalView™ of the Energy Markets