West Texas Intermediate crude futures climbed above $100 per barrel for the first time since 2022, driven by escalating supply disruptions and intensifying geopolitical tensions. The rally comes as traders simultaneously position for a pivotal Federal Reserve policy meeting scheduled for this week.

Market Context

Global equity markets showed mixed signals ahead of the dual catalysts, with the S&P 500 trading flat while energy sector ETFs surged over 4%. The U.S. dollar index weakened 0.3%, providing additional support to dollar-denominated commodities. Treasury yields remained elevated as investors weigh the Fed's potential path forward on interest rates.

Analysis

The oil surge reflects mounting supply-side pressures, with OPEC+ maintaining production cuts while unexpected outages hit key producing regions. Analysts note that inventories have drawn down significantly over the past quarter, leaving markets vulnerable to further shocks. Simultaneously, the Fed meeting carries major implications for energy demand, as higher rates could dampen economic growth and reduce consumption. Micron's upcoming earnings will serve as a barometer for semiconductor demand, with implications stretching across technology and industrial sectors.

Key Numbers

- WTI crude futures settled at $100.24 per barrel, up 3.2% on the day

- Brent crude traded at $104.18 per barrel, a 2.8% gain

- U.S. crude inventories fell 4.2 million barrels last week, versus expectations of a 1.5 million barrel draw

- The Fed funds futures market prices in a 72% probability of rates holding steady this meeting

- Micron is expected to report earnings per share of $1.18, representing 12% year-over-year growth

What to Watch

The Fed's post-meeting press conference will be critical for energy markets, as any indication of a hawkish pause or potential rate cuts could shift demand expectations. Oil traders will monitor weekly inventory data for further supply signals. Micron's earnings report Wednesday could influence broader risk sentiment, particularly in growth and technology sectors.