Crude oil futures are experiencing a rebound as geopolitical tensions rise, with the US preparing to reinforce sanctions on Iran. This move threatens to disrupt Iran's crude exports, adding a layer of uncertainty to the global oil supply. The broader market context includes a rally in stocks, driven by optimism that China may ease its stance on tariffs, which has particularly benefited big tech companies sensitive to trade relations. Meanwhile, a decline in 10-year Treasury yields suggests reduced concerns over economic overheating, potentially increasing investor interest in equities.
The weakening of the Bloomberg Dollar Spot Index by 0.7% further supports US exports by making them more competitive, which could bolster economic growth and corporate earnings. In contrast, the Mexican peso's 0.6% decline reflects ongoing uncertainties in US-Mexico trade dynamics, while the Canadian dollar's 0.7% rise indicates positive sentiment towards US-Canada economic ties.
As of 16:13 on February 4, crude oil futures are trading at $75.94, slightly down from the last close of $75.96, after reaching an intraday high of $76.67. The market's focus remains on geopolitical developments and their potential impact on oil supply and prices.