Crude oil fell sharply last Friday, following news that Saudi Arabia and Russia are walking back from discussions to extend OPEC's supply cuts. Hurricane Nate also weakened to a tropical depression, after initially making landfall as a category 1 hurricane. As we recently wrote in our bull case for crude, rising inflation expectations may power the commodity to new highs in the near future. Our medium-term outlook on crude remains neutral, as prices remain range-bound.
This morning, both Brent crude and WTI are rebounding. WTI remains below $50, and is currently trading just below $49.50. Brent crude is currently above $55.60, having weakened down to $55.50 last Friday. After entering overbought conditions earlier this week, crude oil is now trading within a normal range.