Brent Crude Retreats from Recent Highs as $100 Oil Keeps Bond Markets on Edge

Oil prices have retreated from recent highs, with Brent crude trading just below $102. The decline is largely due to easing concerns over Saudi supply disruptions and stronger-than-expected exports.

The oil curve remains heavily backwardated, meaning near-dated contracts are trading at a premium to later deliveries. This has had a more significant impact on WTI crude, which experienced a gap down in price following the contract rollover on September 18.

Despite the decline in oil prices, $100 oil remains a key psychological problem for broader markets. As long as prices remain around this level, the inflation question doesn't disappear, and bond markets will continue to be sensitive to it.