Brent crude oil made its way above $109 on Wednesday morning as expectations rose for a drop in US oil inventories and the situation in Ukraine continued to deteriorate. The commodity traded at $109.41 at 6:15 GMT, near a two week high.
With the US approaching its summer driving season, analysts expect data to show that US stockpiles fell last week. On Tuesday, the American Petroleum Institute released a report showing that stocks of crude oil in Cushing, Oklahoma fell 590,000 barrels last week and nationwide crude stocks were up 912,000 barrels.
The US Energy Information Administration is set to release its more closely watched version of the report later on Wednesday, which most are expecting to show a draw in US stocks. According to CNBC, analysts see Brent rising above $110 per barrel if the data comes in as expected.
Meanwhile, escalating tension in Ukraine has kept oil prices supported. After the EU imposed new sanctions that targeted 13 people and two Crimean companies, Russia responded by saying the sanctions are hampering efforts to de-escalate the conflict. Following the secession vote over the weekend, the Kremlin has been working to persuade the Ukrainian government to negotiate with eastern Ukrainian separatists ahead of the nation’s May 25th presidential elections. Now, Moscow has called on the US to help persuade Kiev to hold the talks.
However, the nation seems to be slipping further and further out of Kiev’s control as fighting between pro-Russian separatists and the Ukrainian military rages on. On Tuesday, seven soldiers were killed and seven more suffered injuries in an ambush, marking the largest loss of life for the Ukrainian army since the conflict began.
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