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Inventory data dings oil prices

Brent holding above the $60 threshold after recent rallies.

By Daniel J. Graeber

NEW YORK, Dec. 24 (UPI) -- Global crude oil prices in Wednesday trading were off close to 2 percent on average on word U.S. crude oil inventories were on the rise.

Brent, the global price index for crude oil, lost more than 2 percent of its value from the previous session to trade near the $60 per barrel mark for the February contract early Wednesday. Brent has been able to hold above the $60 threshold, largely on good economic data from the United States and China, but is still well below the June levels above $100 per barrel.

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West Texas Intermediate, the U.S. benchmark, fared no better, shedding 1.7 percent from the previous trading day to sell for $56.14 for the February contract.

The American Petroleum Institute released data late Tuesday showing U.S. crude oil stockpiles grew by 5.4 million barrels for the week ending Dec. 19. Prices mid-day could rally after the U.S. Energy Information Administration releases its weekly report, which is expected to show a decline in inventory of about 1.8 million barrels.

A rally could also follow U.S. stock indices after the opening bell on word the U.S. labor market was improving. The Dow Jones Industrial Average passed the 18,000 mark for the first time ever Tuesday on signs the U.S. economy was improving.

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Low energy prices are translating to a de facto economic stimulus. Economists with the International Monetary Fund this week said low oil was a "shot in the arm" for the global economy.

Investor T. Boone Pickens told CNBC this week the low price of oil would be a short-term phenomenon. Prices for Brent should recover to at least $90 per barrel within the next 18 months, he said.

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