The Fed and a weaker dollar could save the day, as could improved supply statistics. That could still mean that this downswing might turn out to be a correction of the latest rally, not the beginning of a major move lower.

Ric Spooner

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My view is that oil prices will find a low between $39 and $42 per barrel over the coming weeks, after that, however, we are coming closer to seeing a balanced market again.

The market is looking past the coup, there is no disruption to shipping. There is nothing in terms of short-term risk (to oil supply).

There was another set of strong retail sales data (on Friday) - U.S. GDP numbers have done pretty well in the second quarter.

Certainly ($50) is a psychological barrier. There is a momentum, people will try and push it up over that, (From a) practical point of view will there or will there not be a sustainable increase above $50? At the $50-$55 range there has got to be a good chance of seeing the peak.

The potential risk for prices is for the downside as freezing output at current levels would be more of a symbolic act rather than a real market intervention. But you need to be open to surprises in this market.

There is demand growth, and production in the U.S. is falling, so if against that background there was a freeze, markets could get tighter at some stage.

There's a little bit of steadying in oil prices in the Asian time zone. The predominant attitude is one of wait-and-see until the Energy Information Administration (inventory) figures come out.

The market is seeing how currencies go as well. It was slightly disconcerting for the market (on Tuesday) to see oil prices falling at the same time as the dollar was falling.

I share the consensus view that producers are unlikely to reach an agreement (on cuts), the rationale being the need to satisfy two conditions, first, any price gains must offset losses achieved from volume cuts - production cuts must be meaningful - sufficiently large to achieve a substantial price increase. And they will have to involve everybody - all the major (producer) players. That will be difficult to achieve.

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The strength we saw in the middle of last week has not been completely overturned but the direction has reversed.

We are likely getting closer to a more balanced market. by Ric Spooner

We are likely getting closer to a more balanced market.

While you can never be certain, (charts) suggests this is not going to be a false break. The latest breakdown follows failure at the 200-day moving average a couple of weeks ago.

I wouldn't want to conclude there is a real bounce going on, i'd like to see U.S. crude go beyond $46 a barrel to conclude the downtrend had finished.

If declines keep going at this rate it could be 18 months-two year's away before lower production affects any rally we see in prices.

I think there is a bit of investor relief China's stock market op... by Ric Spooner

I think there is a bit of investor relief China's stock market opened relatively firm.

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Any change in sentiment tends to be amplified. Any change in direction in the oil markets has the potential to be risk driven by what's going on in the equity markets.

And I think if we did see a very strong number in the nonfarm payrolls this week, it would certainly give them an opportunity ... to make their move in September.

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As far as the oil market is concerned, the potential ramifications are downward, if the situation drags out then that will be a dent to confidence for investors.

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The deadline is likely to be extended so that makes it a little less at the cutting edge of thinking right now, but we have rallied a fair way so the market is a bit vulnerable to increases in supply.

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