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Positive Fundamentals Allow Crude Oil Maintain Rally

Summary:
Prices for crude continued to rally today as fundamentals remained positive for the commodity. Crude had to thank the same factors that were supporting gold: dovishness of the Federal Reserve and, what is more important, the geopolitical tensions in Middle East. And unlike for gold, the potential meeting between leaders of the United States and China is positive for oil, not negative. If the world’s two biggest economies will be able to avoid a trade war that should be very beneficial to the global economy, and that in turn should support demand for oil. But crude had its negative factor in the form of the US oil rig count from Baker Hughes, which showed an increase of the number of US oil rigs this week. The increase was minimal though, by just 1 rig to the total of 789. Futures

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Prices for crude continued to rally today as fundamentals remained positive for the commodity. Crude had to thank the same factors that were supporting gold: dovishness of the Federal Reserve and, what is more important, the geopolitical tensions in Middle East. And unlike for gold, the potential meeting between leaders of the United States and China is positive for oil, not negative. If the world’s two biggest economies will be able to avoid a trade war that should be very beneficial to the global economy, and that in turn should support demand for oil.

But crude had its negative factor in the form of the US oil rig count from Baker Hughes, which showed an increase of the number of US oil rigs this week. The increase was minimal though, by just 1 rig to the total of 789.

Futures for delivery of WTI crude oil in August gained 0.63% to $57.43 per barrel as of 22:10 GMT on NYMEX today. Contract for delivery of Brent crude jumped 1.40% to $65.35 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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