Oil prices are struggling today as there are many conflicting things that are raising doubts about the health and safety of the global economy and the globe in general. The American Petroleum Institute (API) seems to have a conflict with reality after reporting an almost unbelievable increase in gasoline supply. The Texas Railroad Commission reports that oil production in Texas is way below what the Energy Information Agency (EIA) is reporting. Donald Trump may raise tensions in the Middle East as he looks to announce the move of the U.S. embassy in Israel to Jerusalem. The Saudi lead coalition continues to hammer the Yemen capital after the leader in Yemen seemed to change sides. A drop in copper, after a build in supply, is also raising fear that the Chinese economy may be slowing down. With so many conflicts I am conflicted about where I should start first.

So, let us start with the API report that is raising many questions in trading rooms around the globe about the reliability and accuracy of their data. As expected the API reported a draw in crude not far from the whisper number of down 5.481 million barrels led by a 1.951 million barrel drop in crude supply.

Yet, a reported 9.196-million-barrel increase in gasoline supply shocked and awed the trade and seemed to suggest that no one traveled on Thanksgiving. Somehow the holiday must have skewed the data and the API once again are either adjusting for a past error or will have to adjust for this error later. For traders and hedgers, it is very disturbing that week after week we have to continue to question the accuracy of these weekly figures, especially because both the EIA and API are supposed to be reporting on the same thing and yet come up with different numbers week after week. They also reported a questionable 4.259-million-barrel build in distillate supply.

That brings us back to the MIT report that shows that the EIA is probably overestimating shale oil production by close to 10%. That assumption is backed up by a report by the Texas Railroad Commission released earlier this week. They reported that Hurricane Harvey was the culprit that caused a 15% drop in crude production in September compared to last year. Yet, Texas oil producers claim the drop-in supply is not just about the hurricane but declining production at the wellhead. Regardless of the reason, the number is way below EIA estimates. The EIA reported that Texas production saw a 13.4% increase from a year earlier.

Fox News reports that President Trump, on Wednesday, will order the State Department to begin moving the U.S. Embassy in Israel to Jerusalem from Tel Aviv, senior administration officials said, a move that fulfills a campaign promise made to religious conservatives but one that could inflame tensions across the Middle East. In his announcement, Trump will say that the U.S. government recognizes Jerusalem as the capital of Israel. One official described it as an "honest" acknowledgment of a "seven-decade-old fact."

“While President Trump recognizes that the status of Jerusalem is a highly sensitive issue, he does not think it will be resolved by ignoring the truth that Jerusalem is home to Israel’s legislature, its Supreme Court, the prime minister and is such the capital of Israel,” one official said.  Some are calling for a “day of rage” in response. Stay tuned 

Reuters reports a Saudi-led coalition intensified air strikes on Yemen early on Wednesday as the armed Houthi movement tightened its grip on the capital after it killed former president Ali Abdullah Saleh, who switched sides in the civil war. This could add to risk.

The worst copper drop in three years is raising fears about a global slowdown! What a difference a day makes. Risk off and blinders up!