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After last week’s worse-than-expected economic data the market was bracing itself this week for more downward falls as fears mounted over the sustainability of the recent growth spurt.

Due to July 4th Independence day U.S. markets were closed on Monday so oil was fairly static, however Tuesday was a different story as all markets were back to operational strength and forecasts for the ISM Non manufacturing Index were influencing sentiment.

As expected, analysts, traders and investors were hesitant about the results of the data and sentiment was negative from early morning with both WTI & MGO negative. However once the U.S. opened it was clear that the bulls were in charge as equities markets reversed five days of losses. The rally was caused by a report showing the services sector grew for the sixth month in a row in June and also on signs of strength in Europe’s banking system.

This was short lived though as the ISM data was released and showed a slower rate of growth than expected. Although this appears to support last week’s data market participants took this news as more positive than negative as growth was still registered. However the brief spike was also short-lived with WTI settling $0.16 cents lower @ $71.98 per barrel & Brent also ended lower $0.02 cents @ $71.45 per barrel.

The market opened up down this morning, however losses have reversed and the market is on a level playing field with last night’s settlement prices. The cause for this has been a strengthening dollar putting a roof on the bullish forecast for today’s API stock report.

Reuters predicts a 2.6 million barrel draw in crude stocks, a draw in gasoline inventories of 300,000 barrels and a 1.5 million barrel increase in distillates. If the crude draw is less than anticipated the market could be headed for further falls as the draw has already been priced in. Due to the public holiday on Monday the API will be released today and the EIA tomorrow…a day late.

The technical’s suggest that should the market stay below $72.93 there will be a green light down to $69.14 per barrel, the 100 week M/A. WTI is currently up $0.70 cents @ $72.69 per barrel & MGO 0.1% is currently down $5.19 PMT @ $621 - $625 Per barrel.