Oil intermarket: recoveries in stocks and fundamentals driving price action

While the price of oil is being driven by fundamentals in the oil market, there have been some recent convergence with stocks.

The S&P rallied on the pretense that the Fed would not be hiking this year, but started to stall at 2160 in the middle of July again as September was put back on the table and oil accelerated on the downside from  $46 down to below the $40 handle to $39.26 lows. The began to recover as stocks picked up again but that recovery in oil has been instigated fundamentally with sentiment was boosted amid renewed hopes for an agreement among OPEC members, including Venezuela, Ecuador and Kuwait and exporters, to freeze output. 

However, while the stock markets rally, driven by stocks of fuel products, while global growth remains slow and demand is lacking still, oil prices could remain further pressure in the near-term and with the recent nonfarm payrolls numbers, the Fed could be expected to hike on a continuation of strong recoveries in the economy weighing on stocks and ultimately demand. Meanwhile, the price is above the 100 sma on the hr chart and remains better bid.