Oil Prices Struggle Above $100 as Supply Concerns Persist and Treasury Yields Soar
Markets have been grappling with two pressing questions this week: can Brent crude oil hold above $100 per barrel and will the 10-year U.S. Treasury yield remain below 5%?
On Thursday, September 24, both questions received answers that were not what the market had hoped for.
Brent crude oil rebounded to above $102 per barrel after overnight gains, while the yield on the 10-year U.S. Treasury note surged past 5%, reaching a high of 5.11%, its highest level since 2007.
Shipping data from the Strait of Hormuz is a timely reminder that the oil market remains fragile. The latest data shows that only 10 vessels transited through the strait on Wednesday, well below the 10-day average of around 17.
While upbeat diplomatic headlines have helped reduce the geopolitical premium in oil prices, shipping data suggests that underlying supply concerns remain unresolved.