Oil near two-month high as equities soar and US stockpiles draw

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Oil near two-month high as equities soar and US stockpiles draw
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Brent for September settlement was little changed at $87.38 a barrel at 10:14 a.m. in London.

Oil traded near a two-month high with global equity markets at a record and shrinking US inventories boosting optimism of a summer rally. Brent crude traded around $87 a barrel, headed for a fourth weekly advance, with a recent rally aided by positive sentiment across markets. The biggest drop in US stockpiles in almost a year signaled tightening supplies this week.

Crude has been on a slow and steady grind higher since the beginning of June partly due to a positive outlook for demand over the Northern Hemisphere summer, with bullish, backwardated timespreads signaling healthy near-term consumption. “There is little to doubt the voracity of the current rally in oil prices,” said John Evans, an analyst at brokerage PVM. “The many calls of a much better path for bulls in the third quarter at present seem to hold true.

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