Oil inter-market: Further downside in play as US equities indicate

The US oil benchmark, WTI, halted its post-Brexit rebound and fell Thursday on the back of renewed jitters over the economic and political uncertainty triggered by the Brexit-vote that resurfaced and dampened the demand for the black gold.

Over the last hour, the US oil is seen consolidating the latest decline, unable to decide a clear direction as the intrinsic valuations remain mixed at the moment.  

Oil seems to have parted its ways with the US dollar and hence, trades out of sync with the DXY (greenback’s gauge). During the European session, the DXY witnessed a sharp decline and dropped to daily lows at 95.63, while during the same time period, oil looked to stabilize after the move lower.

Among the other intrinsics, it can be clearly observed that oil lock-steps in with the broader US equity index (S&P 500) and the US 30-year treasury yields, both now turning lower and therefore, suggest poor risk tone persistent in the markets. This signals that oil price-weakness is likely to extend in the session ahead.