Oil extended upside on Tuesday as cold front in the US looming from the Arctic Circle forced a halt to oil drilling and refining in Texas, the heart of the US oil industry.

Extremely bad weather conditions and low temperatures in parts of the United States have led to a decrease in power generation along with an increase in demand for it, which led to a jump in the spot price of electricity. Some regions have introduced rotating blackouts to somehow balance the deficit and the surging demand for heating. Severe cold also stopped the production and refining of oil in Texas, Bloomberg estimates the reduction in production at 1 million b/d (the US produces more than 12 million b/d). Storm warnings in Texas are expected to continue through Thursday.

The quotes were also positively affected by reports that the Iranian-backed Houthis launched another drone attack on Saudi Arabia's transport infrastructure. The attack failed, but part of the market decided to price in possible risks, which supported the quotes.

Nevertheless, on the technical side oil is significantly overbought as indicated by RSI above 70 and a healthy correction is needed "digest" the recent growth and determine further direction. Fundamentally, oil prices could extend their rise thanks to global economic recovery and hence improving demand for energy.

SPX futures rose 0.5% on Tuesday, while the global stock market index MSCI ACWI, which has never closed in the red since the beginning of February, renewed its peak again. Asian stocks continue to rise faster than their Western counterparts, Asia-Pacific stocks are up 0.62% today, while Japan's Nikkei is up 1.4%. The Hang Seng Index in Hong Kong rose to a 32-month high.

Risk demand clearly dominates on Tuesday. In the cryptocurrency market, Bitcoin has tested a new all-time high of $ 50,000 thanks to news that JP Morgan is going to invest in it.

The bullish view of the economy continues to push bond yields higher. The 10-year Treasury yield rose to 1.24%, its highest level since March. At some point, the stock market may not like this, since an excessive rise in the cost of borrowing in the market can provoke the Fed's intervention. Therefore, it is worth staying on the alert.

Investors are awaiting the release of the minutes of the last Fed meeting, which will be published on Wednesday and will likely indicate the central bank’s bias to continue to keep rates near zero.

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