Oil intermarket: DXY and oil highly correlated awaiting inventory data

WTI at $48.15 has made some ground today, rallying from $46.75 with the dollar falling behind the market's appetite along with US yields on the floor. 

The move comes in stark contrast to yesterday's performance when oil prices finished lower Monday as Saudi Arabia and three other countries cut ties with Qatar, raising uncertainty about Middle East oil production. The market has, however, decided that the geopolitical tension related to Qatar. It is unlikely that the nation would want to escalate problems on its doorstep with the Saudis and would aim to diffuse the situation rather than escalate it.

For today, a key release will be the Weekly Statistical Bulletin (WSB). This is regional data relating to refinery operations and the production of the four major petroleum products: motor gasoline, kerosene jet fuel, distillate (by sulfur content), and residual fuel oil. These products represent more than 85% of total petroleum industry.

The buying interest has come in ahead of inventory data. WTI is also catching a bid on a weaker dollar while US yields remain subdued. The 10 year made a low of 2.12% today, down -1.92% and are at 2.1399% at the time of writing. the break of the $48 handle is significant and the price of WTI can target $48.20 and $49.00 with resistance at $48.90/99.