Oil falls to lowest price in two weeks

Following Bernankes comments regarding US inflation risks and associated intervention options to support the currency, the collar staged a rally which saw oil fall to its lowest level for two weeks.

US WTI sits at around $124.50 this morning with Brent crude at $124.60 ahead of EIA data this afternoon which is expected to show stock rises in crude, distillates and gasoline reflective of slowing demand.

Structural moves globally to arrest the ascent of oil are also now being implemented with Asian countries paring back energy-related subsidies.

In the US the CFTC has moved to take the steam out of speculative activity with plans to up surveillance of commodity trades and a push by the legislature to up margin calls and tighten position limits.

With the focus in the markets very much on bearish elements, the likelihood of further slippage in the wake of a larger-than-expected build in stocks is high with a target for Brent of $123.00.

Todays range for Brent likely to span $123.36-125.50