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Crude Oil Rises as US-China Relations Show Signs of Improvement, Erases Gains Later

Summary:
Futures for crude oil rallied today as the market sentiment was positive. By now, though, the commodity retreated, erasing its earlier gains. Traders felt more confident and willing to risk after reports that China decided to exempt 16 US goods from tariffs, while the United States will postpone implementation of new tariffs on Chinese goods till October 15. Markets considered the gestures as a sign that both countries want to maintain good relations and avoid a trade war. Adding to the bullish momentum of crude was yesterday’s report from the Energy Information Administration. It showed that US crude oil inventories shrank by 6.9 million barrels last week — much more than was expected. The main risk for oil prices is today’s monetary policy meeting of the European Central Bank. Experts

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Futures for crude oil rallied today as the market sentiment was positive. By now, though, the commodity retreated, erasing its earlier gains.

Traders felt more confident and willing to risk after reports that China decided to exempt 16 US goods from tariffs, while the United States will postpone implementation of new tariffs on Chinese goods till October 15. Markets considered the gestures as a sign that both countries want to maintain good relations and avoid a trade war.

Adding to the bullish momentum of crude was yesterday’s report from the Energy Information Administration. It showed that US crude oil inventories shrank by 6.9 million barrels last week — much more than was expected.

The main risk for oil prices is today’s monetary policy meeting of the European Central Bank. Experts expect the ECB to introduce measures to stimulate the struggling economy of the eurozone. The move will likely result in a rally of the US dollar, putting pressure on commodities priced in the US currency.

Futures for delivery of WTI crude oil in October fell by $0.26 (0.47%) to $55.49 per barrel as of 9:05 GMT on NYMEX today. Contract for delivery of Brent crude in November fell by $0.40 (0.66%) to $60.41 per barrel on ICE.

If you have any questions and comments on commodities today, use the form below to reply.


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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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