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Crude Oil Continues to Soar on Middle East Tensions, Dovish Fed Also Helps

Summary:
Futures for crude oil soared today, with WTI crude rallying more than 5%. The reason for that was the news that Iran shot down a US drone. The United States claims that the drone was shot down over an international territory, while Iran says that it has crossed the Iranian border. Whatever the case, tensions between the two countries will continue to rise, and that can potentially threaten supply from Middle East. And that is bullish for crude. Another bullish factor for crude were prospects for an interest rate cut from the Federal Reserve, though dovishness of the European Central Bank was helping the commodity as well. Market analysts argued that introduction of more stimulating monetary policy will spur economic growth, and that is positive for oil demand. Additionally, the dovish Fed

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Futures for crude oil soared today, with WTI crude rallying more than 5%. The reason for that was the news that Iran shot down a US drone. The United States claims that the drone was shot down over an international territory, while Iran says that it has crossed the Iranian border. Whatever the case, tensions between the two countries will continue to rise, and that can potentially threaten supply from Middle East. And that is bullish for crude.

Another bullish factor for crude were prospects for an interest rate cut from the Federal Reserve, though dovishness of the European Central Bank was helping the commodity as well. Market analysts argued that introduction of more stimulating monetary policy will spur economic growth, and that is positive for oil demand. Additionally, the dovish Fed hurt the US dollar, and that helped dollar-denominated commodities.

Futures for delivery of WTI crude oil in July skyrocketed by 5.56% to $56.75 per barrel as of 15:01 GMT on NYMEX today. Brent crude for delivery in August surged 4.19% to $64.41 per barrel on ICE.


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Vladimir Vyun
Vladimir is an online journalist with background in computer science and work experience in pension funds. He contributes news reports, fundamental analysis and sentiment forecasts to TopForexNews.com and CommodityBlog.com. His main specialization is the currencies of emerging economies and inter-market correlations with commodity and bond trading.

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