Oil prices dropped sharply this morning with the $97 price level approaching fast. Data releases out of China and the US today are driving many investors away from physical assets in expectations of a decline in growth among two of the world's largest economies. The weakness of OPEC, revealed in last week's meeting, also suggests that production output may become a more unilateral decision in the weeks ahead, possibly leading to boosts by Saudi Arabia and other Western allies.
The value of the US dollar versus the euro in recent trading has also dropped towards a six-day low of 1.4530, which has helped prevent oil prices from taking off after last week's surprisingly unhinged OPEC meeting. With today's steady sideways movement, traders appear likely to see oil reaching a decision point this week; which may have taken place yesterday. A test of this weekly low is expected over the next few days.
