What’s going on with Oil?

From the FXWW Chatroom – This is one of the most popular questions asked today. 
Speaking to our trader team, today’s oil market is trading on a mix of factors. Here’s what discussions are centered around: 
·       The equity sell-off. 
·       Genscape reported smaller draws than expected at Cushing (ie the pricing hub for CME WTI contract). 
·       Overall, many continue to respect expectations that the market is oversupplied. Sensitivity was shown on both Tuesday and Wednesday this week with unexpected builds in API and DoE surveys. 
Hurricane Joaquin is also something to watch for – how it develops relative to expectations for a strong storm. 
In the vol space, our traders report that we’ve seen a big sell-off. Implied standard deviation is now 1.13, which our team describes as pretty low. 
Bottom-line, looking ahead, this market may remain pretty choppy. 

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