Oil drop another issue for the stock market

Oil storage tanks in Denver
Rick Wilking | Reuters
Oil storage tanks in Denver

While much of the focus on the stock market's drop concerns the incident in Canada, another development is also weighing on stocks: oil has renewed its decline, which was a part of the market's drop last week.

The catalyst today occurred at 10:30 AM ET, when the Department of Energy (DOE) reported a big build in oil inventories. West Texas Intermediate crude oil immediately went from roughly $82.50 to $81.70. Although it recovered its losses in the next hour, it then dropped again around noon ET.

It's unlikely there is a relationship between the Canadian headlines and oil dropping. However, it is clear that the decline in oil last week was a major issue for stocks. Although oil dropping is good for the U.S.economy, the decline became a proxy for deflation and slowing global demand in general, and so was viewed with some concern.

Oil settled at the close at 2:30 ET at $80.52, the lowest level since June 2012, but has drifted even lower in electronic trading after the close.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

Wall Street