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Crude Oil Bounces, Bearish Trend Remains in Place

September 11, 2014 at 3:02 by Vladimir Vyun

Crude oil bounced today following yesterday’s drop, yet the bounce was not big enough to erase the losses and reverse the bearish trend. The Energy Information Administration reported that US inventories shrank by 1.0 million barrels to 358.6 million barrels last week. The decline was not as big as some market participants have expected, and this might explain the drop of prices. Moreover, Cushing stockpiles actually rose by 78,000 barrels to 20.4 million.

The situation in Ukraine remains a source of uncertainty for the energy market. On one hand, the European Union and the United States are trying to ramp up sanctions against Russia. It is a positive factor for crude that adds risk premium. On the other hand, the current cease-fire agreement between the Ukrainian authorities and pro-Russian separatists gives hopes for a some form of resolution for the conflict, and erodes support that oil was receiving from geopolitical risks.

October futures for delivery of WTI crude oil rose 0.17 percent to $91.83 per barrel as of 3:00 GMT on NYMEX today. Contract for Brent crude added 0.12 percent to $98.16 per barrel on ICE.

If you have any questions and comments on the commodities today, use the form below to reply.

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