[BillPaay]

Crude continues to struggle near the $66 level front month WTI. Tensions between the west and Iran over Iran’s nuclear program seem unable to ignite any substantial short covering so far. Market had expected the $64.85 - $65 level to hold for the time being with a short covering rally to take us up for a test of $68.51. As yet any sign of a significant rally was left in the dust of the knee jerk reaction to the southern Californian refinery fire on Friday. We were only able to see a high of $67.09, but that was short lived. The main driver to this sluggish market is the strength seen in the US dollar these past two days. Since reaching a high of 1.4843 EURUSD on Wednesday we have seen the dollar rally back to 1.4619 this morning. Make no mistake the bulk of the crude move these past few weeks has been predicated on the dollar movement. Currently we will still look for the market to steady itself in the $65 region, however, a break below $64.70 would bring in new selling as sentiment would be deeply wounded. A close below $64.70 would likely target the 200 day moving average on front month WTI at $62.41. Today, with little out in the way of major economic data releases, crude will take its cue from the dollar. Tomorrow, we have Euro Zone consumer and industrial sentiment as well as US consumer confidence.