The Shanghai Composite came off another 4.3% bringing it to a total gross pullback of 20.3%, official bear territory. That puts it at a 40% retrace of the leg up beginning from the Nov. lows of 1706.
For a very long time now China has been a key determinant in price direction for oil. The correlation I've seen for Chinese GDP and Energy Demand is .8
Additionally there have been stories regarding recent stockpiling as a consequence of the stimulus.
Commodities May Correct in H2:2009 Due to Excessive Chinese Stockpiling But Rise in 2010 as the Global Economy Starts a Growth Recovery
Any fundamental analyst care to comment?
Naturally the sell off is helping the USD as well.