Oil prices closed lower on Tuesday after Brent and WTI futures touched fresh six-month peaks. The reversal also pushed longer-dated Treasury yields lower, while WTI remains nearly 80% above its level a year ago.
Oil prices pulled back sharply from six-month highs on Tuesday, a reversal that also pushed longer-dated Treasury yields lower. US stocks rose, shrugging off global weakness earlier in the day, Reuters columnist Jamie McGeever reported.
Both benchmarks climbed before they fell. Brent nudged $112/barrel and WTI rose above $110 at their highs. By the close, Brent was down 0.7% and WTI down 1.8%.
US yields fell 5 bps at the long end and rose 2 bps at the short end.
When the US and Iran signed the MOU in June, an end to the war, the opening of the Strait of Hormuz and replenished global energy supplies seemed imminent. WTI's year-on-year price change even briefly turned negative.
But WTI is now nearly 80% more expensive than a year ago, according to McGeever. Inflationary pressures, although supply-driven, are increasingly difficult for policymakers to look through.
Markets and economies are taking the global energy shock in stride. If that reflects expectations that prices will fall soon, they may have to readjust, the column says.
Source: Investing.com
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