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WTI Crude Oil Gains Ahead of Fed Interest Rate Cut

Summary:
Futures for West Texas Intermediate crude oil gained today, while the Brent grade was trading near the opening level for some time, though by now it also joined the rally. The United States and China are set to resume their trade negotiations on Tuesday, but traders are skeptical about the chances of a breakthrough in the talks. Meanwhile, tensions around the Strait of Hormuz are still high, benefiting prices for crude. Perhaps the biggest positive factor for crude is the upcoming monetary policy meeting of the Federal Reserve on Wednesday. Market participants anticipate an interest rate cut. Such an outlook is negative for the US dollar and consequently positive for dollar-denominated commodities. Baker Hughes reported that the number of oil rigs decreased by 3 to 776 last week — another

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Futures for West Texas Intermediate crude oil gained today, while the Brent grade was trading near the opening level for some time, though by now it also joined the rally. The United States and China are set to resume their trade negotiations on Tuesday, but traders are skeptical about the chances of a breakthrough in the talks. Meanwhile, tensions around the Strait of Hormuz are still high, benefiting prices for crude.

Perhaps the biggest positive factor for crude is the upcoming monetary policy meeting of the Federal Reserve on Wednesday. Market participants anticipate an interest rate cut. Such an outlook is negative for the US dollar and consequently positive for dollar-denominated commodities.

Baker Hughes reported that the number of oil rigs decreased by 3 to 776 last week — another positive factor for oil. The gas rig count decreased by 5 to 169.

The CFTC Commitment of Traders report showed that hedge funds and money managers decreased their long positions and increased short positions for light sweet crude oil on both the New York Mercantile Exchange and the Intercontinental Exchange.

Contract for delivery of WTI crude oil in September climbed 0.84% to $56.67 per barrel as of 17:29 GMT on NYMEX today. Brent crude advanced 0.22% to $63.60 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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