Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665
[Jessica Summers, Bloomberg]
Crude climbed the most in more than two weeks as concerns eased that the U.S. and China will engage in all-out trade war.
“We’ve got the U.S. dollar taking a bit of a correction,” said Bart Melek, head of global commodity strategy at TD Securities in Toronto. At the same time, “I get the feeling that the narrative is going to shift here with the trade situation, where I think people are trying to walk back some of the more aggressive rhetoric that we’ve seen.”
Worries over the exchange of punitive tariffs between the U.S. and China added to concerns that oil is piling up at storage tanks in America’s biggest crude distribution hub in Oklahoma, and that production from shale fields is on a relentless rise to record levels. That led the U.S. benchmark crude to dip below $62 last week, after touching a high of more than $66 the week before.
Brent for June settlement rose $1.54 to end the session at $68.65 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a $5.22 premium to June WTI.
The Bloomberg Dollar Spot Index declined for a second session, bolstering the appeal of commodities like oil as a store of value. The S&P 500 Index climbed as much as 1.9 percent.
Prices are rising amid “the realization that maybe the trade war isn’t going to kill energy demand anytime in the near future,” said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. “More than anything, oil prices are following the stock market back higher.”
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