Fear and panic have driven the oil market sharply higher over the last few days. Just last week crude oil was trading at $85 per barrel. Overnight, spot crude hit $103.00 per barrel. This massive spike was all on the back of unrest in the Middle East. Libya is now in what appears to be a civil war but the biggest fear on Wall Street is whether or not it would spread to Saudi Arabia. There have been rumors, panic and much more but as of now, it seems it is subsiding. After hitting $103.00 overnight, oil has faded to the flat line on the day.

Oil stocks had jumped on the price spike in crude but are now falling sharply on its retreat. Exxon Mobil Corporation (NYSE:XOM) is trading at $86.04, -1.03 (-1.18%) while ConocoPhillips (NYSE:COP) is trading at $77.76, -0.81 (-1.03%). However, Chevron Corporation (NYSE:CVX) is bucking the trend, trading at $103.15, +0.88 (+0.86%).

The markets are moving on the flat line today, very muted considering the risks and swings in oil. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $130.92, -0.10 (-0.08%).

The markets will remain focused on oil and the Middle East. In addition, key economic data was released today. At 8:30am ET Jobless Claims were reported to have dropped 22,000 to 391,000. This was a slightly bullish number for the markets. However, Durable Goods minus Transportation fell 3.6%. Then at 10:00am ET New Home Sales were reported down 12.6%.

The markets will begin to look at economic news again, especially with the Non Farm Payrolls number coming next Friday.