Brent crude prices climbed more than 1% to approach $86 a barrel, marking a third consecutive day of gains.
The move reinforces a market regime where energy assets are outperforming broader equities, driven by persistent supply-side concerns and shifting monetary policy expectations.
The rally in oil comes as investors digest softer-than-expected US inflation data, which has cooled prospects for further Federal Reserve rate hikes.
With the central bank’s next policy decision scheduled for July 29, markets are increasingly pricing in a pause or pivot, reducing the near-term headwind on risk assets.
However, equity markets remain cautious, with European indices trading in a narrow range as investors weigh the mixed signals from macro data and geopolitical tensions.
Energy stocks have benefited from the sustained oil price strength, while broader market sentiment remains fragile.