Energy weakness pulled the major equity indices lower once again as oil prices suffered an even further slump both in the pre-market and intraday. Last night, OPEC lowered its projection for 2015 oil demand by about 300,000 barrels a day, to 28.9 million a day. This drop in demand coupled with a huge pop in supply ultimately caused the price of oil to crumble and the equity futures to open in the red. Oil inventory data led to an even further side of prices intraday. In the week of December 5th, there was an unexpectedly large increase in oil imports, which led to a 1.45 billion barrel inventory buildup to a total of 380.8 million barrels. Oil refineries in the US operated at a very strong 95.4% capacity, kept up production, and fed a very large 8.2 million barrel build in gasoline stocks and a very large 5.6 million barrel build in distillate stocks. As a result, the price of crude oil dropped sharply to around $60 per barrel. Below is a chart of the changes in crude inventories over the last twelve weeks.

Additionally, we received very little information on the status of the housing market since according to the Mortgage Bankers’ Association (MBA) there was an almost identical reversal in the weekly mortgage application composite index. In the December 5^th week, the composite index increased by 7.3% after declining by 7.3% in the week of November 28^th. There was a similar situation with the refinancing component which increased by 13.0% after declining by 13.0% in the previous week. The difference between the two weeks, and there's not much, was in the purchase component which increased by 1.0% in the latest week, down slightly from the 3.0% gain in the prior week. There’s one more matching data point, and that’s in the 4.0% year-over-year decline in the purchase index, which really hasn’t shown much life at all this year. Mortgage rates moved higher in the week with the average 30-year mortgage for conforming loans ($417,000 or less) up 3.0 basis points to 4.11%. Ultimately, it’s almost like the last two weeks of data didn’t happen at all since both weeks’ readings just seem to cancel each other out.