Oil prices are pulling back from the 3-year highs set last week and stock markets are rallying after the Friday night missile strikes in Syria did not escalate further.

It seems like when the market is focused on a trade war, equity and energy prices are moving in tandem, while when they’re focused on a real shooting war, the asset classes will move in opposite directions.  There are legitimate fundamental argument for both reactions – a trade war may be bad for demand while a real war could be bad for supply – so it’s likely we could stay in this pattern until both stories move off the front page.

7 more oil rigs were put to work last week according to Baker Hughes’ weekly report.  That brings the total number of active oil rigs in the US to their highest level in 3 years, just in time to capitalize on prices that are at their highest level in that same span.

Money managers still like betting on higher Brent crude oil prices, with the net long position held by the speculative category of trader reaching a new record high last week.  They are less enthused about the US contracts, making small reductions in ULSD, WTI and RBOB for a 2nd week, although those net positions remain well above their previous 5 year range.

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