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Monday, November 29, 2021

Will Crude Oil Price Breakout Signal Rising Interest Rates?

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When prices rise, investors typically think of an improving global economy.

Crude Oil Chart

But when crude oil price rises sharply (by a large amount over a short duration), investors worry about supply issues and/or inflation. Currently, both concerns are becoming more and more evident by the day. I highlighted growing concerns about  due to rising oil and prices.

The chart above looks at a long-term comparison of the price of crude oil versus US Treasury Bond Yields (interest rates). As you can see, crude oil and yields have topped and bottomed together on several occasions since 2008. Currently, crude oil is breaking out above its last top at (1). If crude oil succeeds, it could impact bond yields at (2).

Are rising interest rates around the corner? Looks like investors might want to keep a close eye on crude oil at (1). Stay tuned!

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