Oil surged 6.58% and then gave it all back, closing at $101.79—all in a single day.
Rumors said the U.S. and Iran were close to a deal; Iran came out and denied it. WTI spiked intraday, then reversed course, closing down 1.8%. Brent fell 0.69% to $108.79. The 10-year Treasury yield dipped to 5.07% intraday, then climbed back above 5.1% by the close.
Put simply, oil isn’t trading on oil right now—it’s trading on rumors.
Why can one sentence move prices by six points? Because no one can verify on the spot whether oil flows through the Strait of Hormuz are really disrupted or not. The market can only price oil for the worst-case scenario first, then, once the denial comes out, gradually give back the extra premium it had built in. Rumors get priced in first; facts get reconciled later. That sequence has never changed when it comes to oil.
On CME, the odds of rates holding steady in October are 83.9%; a 25-basis-point hike in December is priced at 76.1%. Oil swings, and long-term inflation expectations swing with it, while the short end hasn’t budged.
Oil isn’t trading on oil right now—it’s trading on rumors. For now, watch for the next statement from the negotiating table: confirmation or denial. Prices will follow.
Rumors said the U.S. and Iran were close to a deal; Iran came out and denied it. WTI spiked intraday, then reversed course, closing down 1.8%. Brent fell 0.69% to $108.79. The 10-year Treasury yield dipped to 5.07% intraday, then climbed back above 5.1% by the close.
Put simply, oil isn’t trading on oil right now—it’s trading on rumors.
Why can one sentence move prices by six points? Because no one can verify on the spot whether oil flows through the Strait of Hormuz are really disrupted or not. The market can only price oil for the worst-case scenario first, then, once the denial comes out, gradually give back the extra premium it had built in. Rumors get priced in first; facts get reconciled later. That sequence has never changed when it comes to oil.
On CME, the odds of rates holding steady in October are 83.9%; a 25-basis-point hike in December is priced at 76.1%. Oil swings, and long-term inflation expectations swing with it, while the short end hasn’t budged.
Oil isn’t trading on oil right now—it’s trading on rumors. For now, watch for the next statement from the negotiating table: confirmation or denial. Prices will follow.