Crudeoil settled up 0.79% at 5633 rebounded to end sharply higher on Thursday as supply concerns after the EU's latest round of sanctions on Russia for its involvement in eastern Ukraine which comes into force tomorrow. Investors also mulled the EIA's weekly oil report on Thursday that showed U.S. crude stockpiles to have dropped last week, albeit less than expected. Meanwhile, President Obama said the U.S. will also announce additional sanctions to support its European allies, fueling fears of disruption in oil supplies from Russia. Crude oil rallied from a 17-month low Thursday morning amid concerns over a likely fall in oil demand, after the OPEC slashed its 2015 growth forecast for oil. After OPEC yesterday, the IEA cut its global oil demand forecast for the year, citing slowing purchases from China and Europe. Additionally, the OPEC cut its average supply forecast for Russia to 10.51mbls of oil per day in 2015, compared to the projections of 10.53mbls of oil per day in 2014. Data from the U.S. EIA showed crude stockpiles to have declined by a less than expected 1mbls last week. In some disappointing economic news, a report from the Labor Department on Thursday showed initial jobless claims in the U.S. rose unexpectedly in the week ended September 6. Markets also await the outcome of the U.S. Fed's two-day policy meet scheduled to take place on September 16 - 17. It is widely expected the Federal Reserve will cut its monthly bond-buying program by $10 billion, with expectations of probable clues as to when it may hike interest rates. Technically market is under short covering and getting support at 5560 and below same could see a test of 5486 level, And resistance is now likely to be seen at 5674, a move above could see prices testing 5714.

Trading Ideas:

Crudeoil trading range for the day is 5486-5714.

Crude Oil prices shot up after the U.S. said it would join its European allies and slapped fresh sanctions on Russia.

The IEA expects non-OPEC supply to expand by 1.6 million barrels per day (bpd) in 2014, and by another 1.3 million bpd in 2015.

The IEA cut its estimate of demand for OPEC crude and stocks for 2015 by 300,000 bpd to 29.6 million bpd.