The performance of CRB's sub-industrials relative to Oil has been a consistently useful indication of economic sentiment. Given the recent performance, Oil prices suggest a significant drop in US Manufacturing PMI - sub-40! This leaves President Obama with a dilemma: one the one hand he needs to pressure Oil down (SPR jawboning?) in order to maintain some semblance of economic growth and recovery (and perhaps jobs) but given the highly correlated (and QEternity-driven liquidity spillover) asset markets, a lower oil price fundamentally suggests lower global growth and technically drags risk-assets lower - which in turn moves stocks lower. Once again an encumbent tries to find the Goldilocks-level of Oil - too hot and growth slumps, too cold and markets slump, just right and get re-elected.
The relative performance of CRB's sub-industrials / Oil (i.e. when oil is outpeforming the blue line drops) implies - with a lag - that US Manufacturing PMI will be dramatically lower by election time...
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Of course, one way around this 'correlation' is to bid up sub-industrials also... but perhaps this helps to explain the recent and sudden drop in crude prices...
It does suggest that TPTB will be trying to suppress Oil vol once it gets into its 'groove' but with event risks everywhere, that seems a lot of tail-risk to take on...