Commodity Blog

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Oil Rises as Traders’ Mood Improves, Supply Shrinks

June 29, 2016 at 10:54 by Vladimir Vyun

The market sentiment was improving following the shock from Britain’s referendum surprising outcome. Market participants were speculations that policy makers in countries around the world are taking efforts to mitigate the fallout from Britain’s secession from the European Union. As the mood was brightening, stocks, high-beta currencies, and many commodities rallied. Crude oil was one of them.

As for factors specific to oil, there were signs of falling supply. The potential worker strike in Norwegia threatens to reduce output from the North Sea biggest producer. In Venezuela, power outages and equipment shortages were hurting production. Meanwhile, the American Petroleum Institute reported that US oil stockpiles shrank by 3.9 million barrels last week.

Futures for delivery of WTI crude oil in August rallied 1.32% to $48.48 per barrel as of 10:47 GMT on NYMEX today. Brent crude gained 1.21% to $49.17 per barrel on ICE.

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