U.S. stock indices opened lower on Tuesday as oil (U.S. Nymex-CLN7 ) continues to slide into bearish territory with a -2.69 percent drop to 43.01 a barrel for WTI July 2017 futures, the lowest level since March 2016, due in part to increased global output levels and boosted by higher levels in Libya and high storage levels in oil tankers.
Oil prices have dropped over 15 percent during the past month and remain under pressure despite OPEC production cuts.
Adding further to the drop in oil prices is the reality that U.S. oil refineries are currently running at record levels, according to EIA (The U.S. Energy Information Administration) which noted the record in a tweet this morning.
— EIA (@EIAgov) June 20, 2017
U.S. stock indices reached record levels on Monday and recent comments on Monday from N.Y. Federal Reserve Bank of New York President William Dudley suggesting inflation levels are improving and moving closer to the Fed’s 2 percent inflation target could face headwinds amid an environment of plunging crude oil prices which impacts prices in the overall economy and the energy sector.
During the Fed’s June monetary policy meeting last week, committee members at the Fed offered a median projection of 1 more rate hike in 2017 after deciding to raise interest rates in June by .25 percent with the federal funds for the 2nd time in 2017.
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