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Threat of Sanctions Against Russia Drives Crude Oil Up

April 28, 2014 at 12:41 by Vladimir Vyun

The conflict between Ukraine and Russia continues to affect many commodities, including crude oil, which rallied today. Representatives from counties of the European Union meet today to discuss additional sanctions against Russia. Bad geopolitical news usually drive oil prices down, but Russia is the biggest producer and the second largest exporter of crude in the world, meaning that sanctions against the country will likely reduce global oil supply significantly.

Signs of economic growth in the United States add to the bullish momentum of oil prices. It is expected that today’s housing report from the USA will be positive. At the same time, swelling US stockpiles of crude impose downward pressure on the prices.

June contract for delivery of WIT crude oil gained $0.55 (0.55 percent) to $101.15 per barrel as of 12:28 GMT on NYMEX today. Brent crude added $0.20 (0.18 percent) to $109.78 per barrel on ICE.

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