Oil moved lower yesterday in tandem with bond prices and equities as the dollar kept advancing and gold scaled yet another historic peak before retreating. The price action had the hallmark of growing macroeconomic concerns as risk was disposed of and sanctuary was sought.
The Middle East war premium comes marching back just in time to save Brent drifting into the ignominy of a $60/barrel handle. Two days of rallies eat at much of last week's 7% loss due to market perceptions of how the pieces of the war puzzle are falling into a timely picture in which Israel finally strikes directly at Iran. A compelling argument emerges that it is due to the US election on why Israel seems intent on keeping the pace of war in such a state.
After last week’s ghastly performance, the week has started on the front foot. Oil has re-gained some of its mojo and rallied hard. WTI settled $1.35/bbl and Brent $1.23/bbl higher. One of the chief motivators was the recent weakness itself as some bounce is always due in a market trending southwards, only the timing of it is usually dubious.
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