One can attribute the weakness in the energy complex to continued concerns emanating from Europe. Germany has made sure that Greece understands it has a choice to make, and the choice must be made now. What Germany refers to with the timeline is that there will be no further negotiations regarding Greek austerity, nor will there be any further delays in the implementation of the agreed upon corrections to their economy.  Germany and the ECB have also repudiated reports that the Central Bank and German government will cap borrowing costs of the peripherals. For its part, Spain wants to see the ECB commit to massive open ended sovereign debt purchases before it takes on the stigma of asking for aid. We think its unlikely that Spain sees what they are looking for; apparently oil traders feel the same way, as they pushed the market slightly lower on Monday.

Helping to support the energy market early in the day was the outlook from the Chicago Fed that although US economic growth remains below its historical trend, an uptick in industrial production has countered that weakness. Oil traders are also watching a new tropical wave development off the coast of Africa that continues to strengthen in the Mid Atlantic. The path of the storm is uncertain for now.

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