Energy

Recent trading sessions continue to highlight a strong bullish bias across the oil market. As reflected in the performance of WTI crude, prices have maintained a solid recovery since the beginning of October and are now up more than 12% since October 8, a development that continues to underline the strength of demand in the short term.

The global equity markets remain under pressure and with oil surging higher again this week, we have even more reason to remain cautious. Already, the S&P and Nasdaq were running support from only a handful of hyperscalers and AI stocks. But even these indices have started to take notice of the deteriorating market breadth and global indices. Still, for me, the ongoing weakness is becoming more evident in the Dow and the small-cap Russell 2000 indices, and as such I will continuing watching these markets closely to provide a more accurate signal about the health of the stock markets.

Brent’s recovery above $100 is reinforcing inflation concerns and pressure on bond yields. Depleted inventories could limit oil’s downside even if a US-Iran deal emerges.

The 10-year Treasury yield is testing a resistance zone respected since the 1920s, as bearish RSI divergence signals fading upside momentum.