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Crude Oil Started This Week on a Positive Note

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Crude oil gained this morning

After gaining on Friday, June 17, for the first time last week, crude oil carried the same sentiment to this week. It was trading higher on Monday morning. At 6:45 AM EST, the crude oil futures contract for August delivery was trading at $49.34 per barrel—a gain of 1.7%. Brent crude was trading at $50.00 per barrel—a surge of 1.7%. The reversal in the sentiment and the stronger dollar supported crude oil prices this morning.

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Brexit fears wane and reversed the sentiment

Even though the increased lead for the “leave” campaign raised concerns about economic stability and pushed crude oil prices lower last week, the sentiment weakened since the murder of Jo Cox, the Labor Party’s lawmaker, on Thursday, June 16. Campaigns were suspended related to the United Kingdom’s vote to leave or stay in the European Union. The impact was observed in recent poll results. The increased momentum for the “stay” campaign was observed in the results of polls conducted after Jo Cox’s death. This changed the sentiment in the crude oil market and supported the price recovery from last week’s fall.

Brexit sentiment dominates the fundamentals

There was a rise in the oil rig count for the third consecutive week. It was reported by Baker Hughes in the report released on June 17. However, the prices didn’t show weakness as the Brexit vote concerns took center stage. Baker Hughes reported that the oil rig count increased by nine and reached 337. In the week ending June 17, major crude oil producers Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), British Petroleum (BP), and Total S.A. (TOT) gained 3.5%, 2.6%, 2.8%, and 1.3%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) gained 0.23%. The PowerShares DB Oil ETF (DBO) declined 0.88%. In the next part, we’ll discuss how precious metals performed on Monday morning.

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