Oil dropped overnight with Chinese manufacturing PMI coming in with another month of contraction. This makes sense from a commodities perspective where less manufacturing of goods means lower raw materials. However with Oil the process is a bit different and the correlations between the stock market and the oil market have yet to be verified.
The drop in oil can be mainly attributed to the increase in supply taking place around the world. While the EIA estimates that there was a 1.4mb/d increase in oil consumption during 2015, and expects to see that same rate in the coming years, despite talks of a slowdown in the global economy.
This is partly due to the fact that a decline in oil makes many retail consumers utilize more of it. Unlike copper, iron ore, and aluminum; the average consume doesn't go out of their way to buy more products comprised of these commodities because of the drop in price. In oil's case many people will be more likely to drive more and buy less efficient vehicles in response to the lower price at the pump. This translates to more consumption when prices are lower not, as the markets correlation seems to be eluding to, lower demand from slower growth.
High correlation to the stock market should be observed, but not looked at as a meaningful indicator without signs of declining demand. The slowing economic indicators in countries like China do not immediately mean there will be less need for oil. China National Petroleum Corp. estimates that oil consumption will rise 4.3% in 2016, only slightly lower that the 4.8% in 2015.
With growth estimates looking to mirror 2015 in most countries, oil prices will be dictated by the supply side of the equation. Will w seem the declines needed to pull down inventories or will there be a repeat of 2015 with supply growing faster than demand. That is going to be the biggest price mover of oil in 2016.