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Last night's API report yielded a whopping 11.4 million barrel build to crude stocks, as a combination of planned and unplanned refinery maintenance gives way to a diminished need for crude in the system. Yesterday's rumors and murmurs of OPEC and non-OPEC coordinated cuts have been thrown by the wayside, while focus on the ailing US shale industry returns to the fore amid quarterly earnings results.

While widespread capex cuts are nothing new in the current environment, the announcement by Continental Resources the second-largest oil producer in North Dakota and one of the most cost-efficient that it needs prices to rise above $37 to be profitable is spooking the oil industry today. Further stoking these fears is Continental's acknowledgement that it is cutting production this year by 10% as it has no more wiggle room for innovation. On the flipside, Pioneer Natural Resources is boosting capex modestly; this is likely facilitated by its aggressive hedging program (at prices much higher than current levels).

Onto the economic data front we go. Hot on the heels of yesterday's better-than-expected confidence data out of the US comes decent numbers from France and Germany today. Brazil and Italy were the Debbie Downers, coming in more downbeat than expected. There is a sprinkling of housing data here in the US before the weekly inventory report. Oh, and then we have the small matter of the conclusion of the Federal Reserve's FOMC meeting. While no rate hike will be forthcoming, the subsequent statement following the conclusion of the meeting will be dissected with microscopic precision.

While much speculation swirls around the return of higher Iranian crude exports to the market, it mustn't be overlooked that Iran holds the world's largest reserves of natural gas ahead of Russia, Qatar, Turkmenistan and the US. With the lifting of sanctions, Iran is exploring the possibility of reigniting (probably not the most appropriate word to use, but hey) its natural gas exports ambitions.

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