I think sovereign debt is starting to catch up with us. Next few months could be a very rough ride for the market imo.
Bloomberg
Oil Heads for Biggest Weekly Drop Since August on U.S. Economy January 27, 2011, 7:07 PM EST Business Exchange By Ben Sharples
Jan. 28 (Bloomberg) -- Oil headed for its biggest weekly decline in New York since August amid concern that the pace of fuel demand recovery in the U.S., the biggest crude-consuming nation, may falter.
Futures extended yesterday?s decline to an eight-week low after the Labor Department reported a bigger-than-forecast increase in jobless claims. Orders for U.S. durable goods decreased in December. Prices also slipped after Japan?s credit rating was cut.
Oil fell ?on mostly weaker U.S. data and after Standard & Poor?s cut Japan?s credit rating for the first time in nine years to AA- from AA, weighing on risk appetite for commodities,? Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd., said in a note today.
Crude for March delivery lost as much as 47 cents, or 0.6 percent, to $85.17 a barrel, in electronic trading on the New York Mercantile Exchange, and was $85.27 at 10:42 a.m. Sydney time. Yesterday, it tumbled $1.69, or 1.9 percent, to $85.64, the lowest settlement since Nov. 30. Prices are down 6.6 percent this year.
Futures are 4.3 percent lower for the week, the biggest drop since the week ended Aug. 13.
Applications for jobless benefits increased by 51,000 to 454,000 in the week ended Jan. 22, Labor Department figures showed yesterday. Economists forecast 405,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls rose.
Brent Premium
Brent crude for March settlement fell 52 cents, or 0.5 percent, to end the session at $97.39 a barrel on the London- based ICE Futures Europe exchange yesterday.
Brent?s premium over Nymex-traded West Texas Intermediate widened to $12.12 a barrel. Investors are buying Brent contracts as a buildup of supplies at Cushing, Oklahoma, the delivery point for New York-traded West Texas Intermediate oil, skews the U.S. grade?s reliability as an indicator of demand.
U.S. crude inventories climbed 4.84 million barrels to 340.6 million last week, an Energy Department report showed. They were projected to rise 1.2 million barrels, according to analysts surveyed by Bloomberg News.
Total U.S. orders for durable goods fell 2.5 percent, depressed by volatility in demand for commercial aircraft, a Commerce Department report showed. The median forecast of 81 economists surveyed by Bloomberg projected a 1.5 percent gain in orders.
Excluding transportation, bookings increased 0.5 percent after a 4.5 percent jump in November, which was stronger than previously estimated and the biggest increase in eight months.
Standard & Poor?s said it cut Japan?s rating because the government lacks a ?coherent strategy? to address the nation?s debt.
