After several days of extremely high volatility, oil prices appear to have calmed down. Brent has been trading largely unchanged at $50 per barrel for the past two days, while WTI has been priced at $46 per barrel.

A surge in the prices of Brent and WTI to $53 and $49 respectively in response to ECB's press conference yesterday (see Precious metals below) proved short-lived. No further selling pressure was generated by news that Saudi Arabia had lowered its official selling prices for October for consumers in Asia, Europe and North America as compared with the respective benchmarks, notes Commerzbank. That said, this nonetheless signals the resolve of the world's largest oil exporter to defend its market shares.

Expansionary production policy pursued by Saudi Arabia and record-high oil production in Iraq caused the oil marketto be oversupplied significantly. In addition, there is the prospect of additional oil from Iran.