The trade talks between the US and China ended with little progress as expected. The oil market is developing a sharp rally. Brent Crude international benchmark jumped over $75, heading for $75.70 a barrel. Yesterday, the two largest global economies slapped new punitive tariffs on $16 billion of each other's goods. The lower level trade talks between the US and Chinese officials do not settle the trade dispute with any agreement. So, the protectionist rhetoric of Donald Trump encourages a steady rally of oil prices. Besides, the oil market funds support from the US sanctions against Iran, which will come into force in November. Today, West Texas Intermediate is heading for a 2-week high. The North American oil grade is now trading at near $68.70 a barrel.
Market participants await a weekly oil rig count from Baker Hughes on drilling activity in the US. Last week, the industry group showed the same number of drilling rigs. So, investors gained confidence in buying oil futures. Interestingly, commodity currencies, including the Russian ruble, are struggling to resist the US dollar. The USD/RUB pair is consolidating at around 67.80. Experts say that the ruble is taking advantage mainly from the weaker greenback. Now, the focus of investors turns to the speech by Fed Chair Jerome Powell at the annual symposium in Jackson Hole. Market participants hope to hear how the policy maker will respond to earlier criticism from Donald Trump about the hawkish rhetoric of the Federal Reserve.