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WTI and Brent futures were higher during midday trade in Europe today, as traders await key reports on US oil inventories. EU foreign ministers meet today to discuss further actions against Moscow, in light of the MH17 incident.

WTI for September delivery on the NYMEX trade for $103.15 per barrel at 7:22 GMT today, up 0.28%. Prices ranged from $102.66 to a weekly high of $103.45 per barrel. The contract added 0.89% on Monday.

Meanwhile on the ICE in London, Brent contracts for settlement in September stood at $107.84 per barrel at 7:23 GMT today, up 0.15%. Daily high and low were at $107.97 and $107.54 per barrel, respectively. Brents premium to WTI was at $4.69, after Mondays $4.82 closing margin. The European contract added 0.41% on Monday.

“We’re now deep into drive time and all the numbers look like it’s been a reasonable season, but there’s been adequate supply to cover it,” David Lennox, resource analyst at Fat Prophets in Sydney, said for Bloomberg. “That’s probably stopping the oil price rushing up to $110. There’s also the potential that we may see further sanctions on Russia and that could include energy sanctions.”

US inventories

The private American Petroleum Institute will post its weekly reading on US oil stocks later today. A Bloomberg survey suggested crude stockpiles saw 2.8 million barrels drawn in the week ended July 18. Gasoline inventories probably added about 1 million barrels, while distillates supplies increased by some 2 million, the survey projected.

The official Energy Information Administration (EIA) report is released each Wednesday.

Last weeks log revealed a 7.525 million-barrel draw for commercial crude oil inventories, while gasoline and distillates added 0.171 million and 2.528 million barrels, respectively.

Elsewhere, US CPI for June will be posted today. Analysts expect consumer inflation to stand at 2.0-2.1% on an annual basis, same as last month and in line with the Feds target figure. Consumer inflation is a major indicator for the health of the economy, as it gauges consumer spending, which generates about 80% of US GDP.

Also to be reported today, existing home sales are projected to have added 2.0% on a monthly basis in June, after a further 4.9% increase was reported in May. The real estate industry accounts for about 13% of US GDP.

Ukraine

The UN Security Council voted unanimously in favor of a “full, thorough and independent international investigation” of the downing of flight MH17. It also demanded that those responsible “be held to account and that all states co-operate fully with efforts to establish accountability”, the BBC reported.

After voicing concern over the wording of the resolution, Russia also voted in favor, sidelining its veto right.

The Malaysian Boeing 777 was shot down over rebel-held territory in Ukraine on Thursday, killing all 298 people on board.

British Prime Minister David Cameron reaffirmed the widely shared view that it was a Russian-supplied Buk missile, fired by pro-Russian separatists, which shot down the Malaysian airliner.

Moscow dismissed any liability again on Monday, denying it has supplied rebels with missiles or “any other weapons”, the BBC reported.

The Kremlin has also pointed that it has detected a Ukrainian military plane withing firing range of the airliner just minutes before it was shot down. Ukrainian President Petro Poroshenko denied there were any airborne warplanes in eastern Ukraine at the time, saying it can be easily confirmed.

Sanctions

The US and EU stepped up measures against Russia last week, expressing concern about the lack of actions by Moscow towards deescalating the conflict in Ukraine.

EU foreign ministers meet today, to discuss the Blocs options. The US imposed capital market access limitations to a number of Russian energy companies, bringing the confrontation between the West and Moscow to “borderline economic war”, according to some analysts.

The EU and US started limiting economic activities and movement freedoms to Russian and Ukrainian individuals and companies deemed liable for Moscows annexation of the Crimea earlier this year. The restrictions were expanded several times later on, as the West saw Russian support for rebels in eastern Ukraine, accusing the Kremlin of supplying the separatists with weapons, training and “volunteers”.

Moscow has denied it has any connections with the rebels. During the Crimean annexation, Russian President Vladimir Putin had also dismissed the Kremlins involvement, only to later admit that it was Russian forces, which occupied the peninsula and drove off the Ukrainian security personnel.

Technical view

According to Binary Tribune’s daily analysis, in case West Texas Intermediate September futures breach the first resistance level at $103.39, they will probably continue up to test $103.93. Should the second key resistance be broken, the US benchmark will most likely attempt to advance to $104.88.

If the contract manages to breach the first key support at $101.90, it will probably continue to drop and test $100.95. With this second key support broken, the movement to the downside will probably continue to $100.41.

Meanwhile, September Brent on the ICE will see its first resistance level at $108.10. If breached, it will probably rise and test $108.53. In case the second key resistance is broken, the European crude benchmark will probably attempt to advance to $109.18.

If Brent manages to penetrate the first key support at $107.02, it will likely continue down to test $106.37. With the second support broken, downside movement may extend to $105.94 per barrel.

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