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Crude Oil Shoots a Spike Up, Retreats

May 6, 2015 at 17:16 by Andriy Moraru

Crude oil demonstrated a rather surprising price action today. It had been rising during the most of the trading session as speculators were expecting some bullish values from the US Energy Information Administration report on the crude oil inventories. However, upon release of such numbers, the commodity initially shoot up just for a few moments and then fell significantly below the opening level.

WTI crude is trading in a well-established rally since its long-term bottom that was reached on March 17. Brent crude has avoided reaching a new low on that day — its multi-year minimum is located on January 13. The North Sea blend looks to be much stronger despite the fact that the oil of all grades is doing great this year.

The report that was released by EIA today has shown an drop of crude oil inventories by as much as 3.9 million barrels during one week. It was the first decline of inventories since the one that was reported on January 7 this year. For some reason, it resulted only in a momentary bullish spike followed by a major daily correction.

Brent fell from $68.45 to $68.01 per barrel as of 17:16 GMT on ICE today, reaching as high as $69.62 per barrel mid-session — a new highest level since December 5, 2014. WTI went down from $61.60 to $61.15 per barrel, while the daily high was at $62.57 — the maximum since December 10.

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

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