It seems like everyone is rooting for the economy these days—even OPEC.
The Organization of Petroleum Exporting Countries announced last week that it believes that crude oil is too costly and unaccommodating to world economic growth. As a result, the cartel plans to raise production in order to keep costs in check. What at first may seem like a munificent gesture is obviously an attempt to increase the long-term demand for crude oil. But markets do not always follow supply-demand dynamics, as the news was countered by violence in Egypt, which resulted in a huge rally in the energy sector last Friday.
That made January 28th an unusual day. Prices of crude oil and stocks have risen in lockstep for some time, which has resulted in a near-perfect correlation between the two. And it's likely that we are we finally facing a longer-term decoupling of these two markets.