Oil demand numbers over the July 4th weekend weren't as strong as many in the market had hoped and that's putting a damper on crude this week. WTI was trading higher earlier in US trade but has quickly shifted lower, falling $1.00 to $81.32.
At 4:30 pm ET, the private oil inventory data will be released and the sudden drop lower today could represent a leak of that. The consensus on tomorrow's official data is a draw of 250K barrels of crude with a draw of 300k barrels of distillates and 1900k barrels of gasoline.
Looking further out, today's drop erases last week's oil gains and highlights a stretched market that's likely to retest $80 as it evaluates summer demand and continued OPEC discipline (it's been high so far with Saudi exports falling). China has also been adding to inventories in a move that helped crude over the past month.
In the bigger picture, the market appears to be most-comfortable in a $75-85 range and I don't see any reason to doubt that.
