Investing.com – The global rout in equities is continuing to punish oil bulls, so much so that many may even doubt the non-correlation between stocks and commodities exists.
Despite a slight gain on the day, crude futures in both New York and London fell as much as 3% on the week for their third-straight weekly loss. The last time oil saw such a bearish trend was between the final weeks of July to mid-August. From there, it took off into one of its most bullish periods for this year, hitting four-year highs, before the rally came to a sudden halt earlier this month.
In Friday’s session, oil’s rebound was limited by the weakness on Wall Street and global equity markets, which posted their longest losing streak in five years.
U.S. WTI settled up 26 cents at $67.58 per barrel, rebounding from a session low of $66.19. It fell 2.2% on the week.
U.K. Brent, the international benchmark for oil, was up 70 cents, or almost 1 %, at $77.59. For the week, it lost 2.8%.
In theory, oil and other commodities should rise when stock markets fall as these are supposed to be real assets with intrinsic value that are non-correlated to equities, providing diversified portfolios a hedge when stock valuations are down. In reality, commodities and equities have often moved together when there’s a flight from risk, with gold often being the exceptional safe haven of choice.