Oil fell for a third day on Tuesday, as a rout in global equities triggered losses across bonds, cryptocurrencies and commodities, although the crude price is in positive territory so far this year.
Even with Wall Street stocks posting their largest one-day fall since late 2011 on Monday and measures of volatility spiking to multi-year highs, reflecting heightened investor nervousness, oil has not suffered to the same extent.
Since the S&P 500 hit a record high on Jan. 26, the index has lost 8 percent. Oil, in contrast, has lost 4.5 percent, while cryptocurrency bitcoin has lost half its value.
A factor that could insulate oil to some extent against a bigger rout is the structure of the forward curve, where the prompt futures contract is trading well above those for delivery further in the future.
"We know that speculative positions both in terms of contracts and in allocated dollars are at an all-time high. Thus a real pain-trade has not yet hit the oil market," SEB head of commodity strategy Bjarne Schieldrop said.
"Longs have not yet started to flock to the exit door. If that happens, it will make the buying opportunity even better for the oil consumers who buy oil on the forward curve."
Financial markets went into a tailspin on Monday after a sharp rise in U.S. bond yields raised concern over a possible increase in inflation and potentially higher interest rates.
U.S. S&P 500 futures tumbled 3 percent in Asian trade on Tuesday, extending Monday's sell-off.
"Suddenly, inflation has become one of the most talked-about issues in markets," U.S. bank JPMorgan said in a note.
Market-based inflation expectations, as measured by the U.S. five-year breakeven inflation rate, reached a 10-month high above 2.10 percent late last week but have since pulled back.
Oil has been caught between the opposing forces of a 1.8 million barrels per day (bpd) cut in supply by the Organization of the Petroleum Exporting Countries and Russia, and a surge in U.S. crude output above 10 million bpd, its highest since the 1970s.
There is also a seasonal downturn in demand, as many refineries shut for maintenance at the end of the peak-consumption winter season in the northern hemisphere.