Oil intermarket: relationships broken down, oil plummets over 2.5%

Oil has sunk to its lowest levels in since the start of May's business and has hit a crucial support line, while the US dollar continues to rally in an environment that data from the US economy continues to impress.

The US dollar is at its highest levels since back in March this year and at the same time, driving season is coming to an end and the rig count is rising while output continues to rise also. At the same time, US stocks keep gaining momentum and the relationship between oil and stocks is usually corresponding, but at this juncture markets are losing their relationships to some extent. We are back in a demand environment yet oil keeps dropping, yields are rising on the 10 year as well at 2.29 now, oil $42.98 and S&P 2167 at time of writing with DXY at $97.