The Petroleum markets took a bit of a breather after surging the first few days in August on rising speculation that the Fed worried about anemic Job Growth and a less then sustainable rate of economic activity will revisit the nuclear option and print more money to get the economy moving again. The Wall Street Journal added to this speculation by raising the possibility that the Fed may reinvest the cash it receives when its mortgage bond holdings mature and buy new mortgage or Treasury bonds, instead of allowing its portfolio to shrink gradually, as it is was expected to do.
This speculation drove traders back into the “carry trade” as the dollar tanked against other major currencies most notably the Yen as traders viewed the US recovery softer than in other parts of the globe. Yet despite some less than spectacular data the oil market anyway backed off the easing talk and tried to focus on weak demand.....
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