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Oil’s losses deepen as Ukraine fears fade

Published 03/17/2014, 11:33 AM
Oil falls sharply as Ukraine fears recede
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Investing.com - U.S. oil futures fell more than $1 on Monday, as concerns over violence in Ukraine eased following the Crimea region’s vote to leave Ukraine and join Russia.

On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in May dropped to a session low of $97.38 a barrel, the weakest since February 7.

Nymex oil last traded at $97.48 a barrel during U.S. morning hours, down 1.21%, or $1.20.

The May contract rose 0.63%, or 62 cents, to settle at $98.56 a barrel on Friday. Nymex oil futures were likely to find support at $97.14 a barrel, the low from February 7 and resistance at $98.95 a barrel, the high from March 14.

Nearly 97% of voters in Crimea chose to break away from Ukraine and join Russia in a referendum held on Sunday. The outcome of the vote had been widely anticipated.

On Monday, European Union foreign ministers imposed travel bans and asset freezes on 21 people they have linked to the push to have Crimea secede from Ukraine to maybe be annexed by Russia.

U.S. President Barack Obama also imposed sanctions on Russian officials involved in the incursion of Crimea.

The conflict has underpinned global oil markets as traders worried it will lead to a disruption of oil supplies from Russia, one of the world's biggest producers.

Meanwhile, data released earlier showed that U.S. industrial production rose by a seasonally adjusted 0.6% in February, easily surpassing forecasts for a 0.1% gain.

The upbeat report came after the Federal Reserve Bank of New York said that its general business conditions index increased to 5.61 this month from a reading of 4.48 in February. Analysts had expected the index to rise to 6.0 in March.

The Fed is to kick off its two-day policy-setting meeting on Tuesday, amid expectations for a reduction in its bond buying program to $55 billion from the current $65 billion.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for May delivery dropped 1.72%, or $1.86, to trade at $106.39 a barrel, while the spread between the Brent and U.S. crude contracts stood at $8.91 a barrel.

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