Oil inter-market: could test $ 45 amid rising VIX, out of sync with DXY

The US oil benchmark, WTI, extended its bearish run for the third straight session on Wednesday, now hitting fresh weekly lows just below 46 mark, as persistent uncertainty over Brexit and signs of a worsening supply glut continue to dampen the sentiment around the black gold.

The latest leg lower in oil can be rightly justified by sharp sell-off in both the broader US equity index (S&P 500) and 30-year treasury yields, as risk-off theme dominates the European session amid mounting worries over Brexit risks. The CBOE VIX index, risk barometer, is seen rallying sharply higher indicating that risk-aversion persists in full swing. Currently, the risk gauge trades nearly +7% at fresh three-day highs of 16.70 levels.

While Oil continues to trade in separate ways with the US dollar on a shorter time frame. During the European session, the DXY, which measures greenback’s relative strength, extends retreat from six-day tops and now hovers near session lows near 96.20.