LET THE SPIRAL BE UNBROKEN

Offering further signs that the recovery is faltering, initial jobless claims rose by 2,000 to 484,000 in the week ended Aug. 7, the highest level since mid February, according to the Labor Department. Additionally, the one country  that had been registering economic health, Australia's employment rate surprisingly rose to 5.3% in July from 5.1% in June.

Yesterday's inventory data showed that there wasn’t much of a summer driving season.  The EIA report yesterday showed that crude inventories dropped by 3 MB compared to expectation of a 1.9 MB fall; gasoline recorded its highest rise in ten years of 409k bbls, where it was expected to only gain by 250k bbls; distillates surged 3.46MM bbls which was expected to rise by 1.75 MM bbls.

The question now is not whether or not there is a growing body of incontrovertible evidenced that a viable sustainable recovery is underway but whether there ever was any recovery at all. The oil market has cast its vote, as we predicted it would yesterday. Unless some hopeful macroeconomic data appears soon, $70 may come under assault quickly.

source: