Crude Falls Below $85 as Supply Builds (USO) (OIL) (DBO) (UCO)

November 7, 2012 10:55 AM EST
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WTI and Brent futures are reversing Tuesday gains in early trading on Wednesday, one day after a victory by President Obama in the presidential elections. With concerns of an election stalemate over, energy traders are refocused on supply and geopolitical issues. On the one hand, ongoing problems in the Middle East including Iranian and Syrian situations remains top of mind, supporting prices. On the other side, overall oil supply appears abundant.

In the wake of Hurricane Sandy, weekly inventory data in the U.S. showed a rise of 1.7 million barrels compared to estimates for a gain of 2 million barrels. Traders were puzzled on Tuesday evening when API data showed declines of 0.03 million barrels.

On the technical side, WTI just broke below support at $85 per barrel and traders continue to set sights on July lows near $77.

United States Oil ETF (NYSE: USO) is lower by 3 percent on intraday on Wednesday.

Other related ETFs include iPath S&P GSCI Crude Oil Total Return (NYSE: OIL), PowerShares DB Oil Fund ETF (NYSE: DBO) and ProShares Ultra DJ-UBS Crude Oil (NYSE: UCO).

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