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Oil Rebounds After US Inventories Fall More than Expected

Summary:
West Texas Intermediate crude oil rallied today, erasing its previous losses. Curiously, Brent crude failed to join the rally initially, though by now Brent has managed to log gains. One of the obvious reasons for the rally was the bigger-than-expected drop of US crude oil inventories. The Energy Information Administration reported that the stockpiles shrank by 3.1 million barrels last week, while analysts had predicted a drop by just 1.5 million barrels. Another possible supporting factor for crude was clarification of date for the next meeting of the Organization of Petroleum Exporting Countries, at which extension of oil production cuts will be discussed. The OPEC members will meet at July 1, while the OPEC and non-OPEC members of the production cut deal will meet on July 2. The delay

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West Texas Intermediate crude oil rallied today, erasing its previous losses. Curiously, Brent crude failed to join the rally initially, though by now Brent has managed to log gains.

One of the obvious reasons for the rally was the bigger-than-expected drop of US crude oil inventories. The Energy Information Administration reported that the stockpiles shrank by 3.1 million barrels last week, while analysts had predicted a drop by just 1.5 million barrels.

Another possible supporting factor for crude was clarification of date for the next meeting of the Organization of Petroleum Exporting Countries, at which extension of oil production cuts will be discussed. The OPEC members will meet at July 1, while the OPEC and non-OPEC members of the production cut deal will meet on July 2. The delay means that the meeting will happen after G20, giving chance for the United States and China to make progress in trade talks. Fears of trade wars were a major detrimental factor for crude recently.

Futures for delivery of WTI crude oil in July gained 0.45% to $54.14 per barrel as of 21:20 GMT on NYMEX today. Brent crude for delivery in August rose 0.11% to $62.21 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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