Oil Prices Fall Below $100 as Treasury Yields Near 5%

Oil prices dipped below $100 a barrel on Monday after Saudi Arabia announced that its East-West pipeline could resume about half of its capacity within days. The 10-year Treasury yield is nearing 5% for the first time since July 2007, while Bitcoin has made a partial recovery from its summer slide but remains down 7% for the year.

The United States Oil Fund (USO) dropped 1.6% in pre-market trading on Monday as retail sentiment around the ETF shifted to 'neutral' from 'bullish'. The Saudi pipeline disruption had pushed oil prices above $105, but easing supply concerns led to a pullback. U.S. Central Command reported that oil shipments through the Strait of Hormuz reached a six-month high.

The Treasury yield crossing 5% weighed on stocks last week even before the Federal Reserve's rate hike, which was expected by markets. Fed Chair Kevin Warsh emphasized persistent inflation risk in his press conference, turning an anticipated but tense session into a rout. Short-dated Treasuries sold off hard enough to send two-year yields to their highest level since 2024.

Bitcoin has been rangebound since its summer recovery, hovering around $80,000. Despite the cryptocurrency market's volatility, retail sentiment on Stocktwits moved from 'extremely bearish' to 'bearish' as Bitcoin recovered some losses after the SEC cleared a path for authorized venues to offer tokenized U.S. stocks.