Crude oil prices are stuck between a rock and a range with seasonal weakness, as well as the promise of more oil production, which is alleviating fears of a tightening global marketplace. On Friday, the market was looking for a reason to rally or break. It got the reason to break on a report by The Wall Street Journal that Russia’s Energy Minister Alexander Novak, who said he “did not rule out… an increase in oil production in excess of 1 million barrels a day may be discussed.”

As we head toward the weekend, oil prices have turned sharply negative after starting the week on the front foot. Barring an unexpected rally later on today, oil prices are set to end a six-week winning streak. This would halt a rally that began a few months ago when oil prices found support after signs emerged that the US would reinstate economic sanctions on Iran and as crude output from some OPEC members fell, most notably Venezuela.

Geopolitics has taken over the oil market, driving oil prices up to three-year highs. The inventory surplus has vanished, and more outages could push oil prices up even higher. Yet, there are some signs that demand is starting to take a hit as oil closes in on $80 per barrel.

The International Energy Agency (IEA), or as I call them the “demand downers,” once again are raising concerns about global oil demand. The agency that has consistently underestimated global oil demand is once again trying to keep their weak demand illusions in the spotlight. A few years ago, it was because that despite the low price, demand would be bad despite clear evidence to the contrary.

Stocks in Asia were uninspired by the slight gains on Wall Street during Monday trading. Although the easing of U.S.- China trade tensions was supposed to be positive for risk assets, the rise in global yields is making stocks less attractive.

Looking for fear in the oil market? Look no further than the Brent versus West Texas Intermediate oil spread that blew out to the highest level all year and the highest since 2015, with Brent holding a $7.30 per barrel premium currently above WTI. European and Asian buyers of Brent are pricing in the risks and realities of the fallout from sanctions on Iran to increased tensions in the Gaza strip as well as the inability of traditional Brent oil producers to fill that void.

Both yellow and black golds are currently finding support from heightened fear among investors that the United States and its allies may soon launch a military strike against Syria. This is in response to the suspected chemical weapons attack in the country. The fear is that there might be counterstrike by Russia, which could further damage Moscow’s relationship with the West.

Too much, too soon. The 36% increase in crude oil prices since August is likely to stimulate a strong production response, with a typical lag, sufficient to keep oil inventories elevated above the five-year average for all of 2018, despite the extension of OPEC’s production cut to the end of the year. It may even undermine OPEC compliance and negatively impact oil demand.

Market players marched into the 2017 trading year adopting a risk-on attitude, amid growing optimism over Donald Trump pushing ahead with a large fiscal spending package. The “trump effect” not only elevated global stocks to 19-month highs in January, but also sent the U.S. dollar to its highest level in 14 years.