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Crude Oil Demonstrates Huge Losses After Fed Hike

December 14, 2016 at 22:56 by Vladimir Vyun

Futures for crude oil demonstrated a sharp drop today. The major reason for the drop was the same as for the decline of precious metals — Federal Reserve’s decision to raise its federal funds rate. That boosted the US dollar and thus put pressure on commodities priced in the US currency.

Earlier, the US Energy Information Administration reported that US crude oil inventories shrank by 2.6 million barrels last week. The actual drop was almost two times bigger than the decline by 1.4 million predicted by analysts. Yet stockpiles in Cushing, Oklahoma, a major trading hub for crude oil and a delivery point for NYMEX crude, rose for the sixth time in seven weeks.

Futures for delivery of WTI crude oil in January sank as much as 4.17% to $50.77 per barrel as of 22:44 GMT on NYMEX today. February Brent crude declined 3.61% to $53.71 per barrel on ICE.

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