West Texas Intermediate crude rebounded from an eight-month low as tension escalated between Russia and the West. Brent was little changed. President Barack Obama said today the U.S. is joining the European Union in slapping more sanctions on Russia for its continued support of separatists in Ukraine. Brent’s premium over WTI narrowed to the smallest since July after the International Energy Agency cut demand forecasts. “These new sanctions add a layer of new volatility back to the market,” said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago. “The market is rising and the news can be the catalyst.” WTI for October delivery rose $1.16, or 1.3 percent, to settle at $92.83 a barrel on the New York Mercantile Exchange. The volume of all futures was 79 percent above the 100-day average. The contract closed at $91.67 yesterday, the lowest since Jan. 9. Brent for October settlement rose 4 cents to $98.08 a barrel on the London-based ICE Futures Europe exchange after earlier sliding as far as $96.72, the lowest since July 2, 2012. Volume was 38 percent above the 100-day average. Brent closed at a premium of $5.25 to WTI.‘Large Correction’ Crude had “a very large correction, which invites a lot of technical buying,” said Harry Tchilinguirian, head of commodities strategy at BNP Paribas SA. “The market is putting its weight behind WTI. People are now seeing that this is a relatively inexpensive level to enter a long position for oil.” The U.S. will “deepen and broaden” sanctions against Russia’s financial, energy, and defense sectors, Obama said in a statement issued by the White House today. The measures will take effect tomorrow and details will be released then. The EU said it would also enact its latest round of economic restrictions tomorrow. Europe is acting against a peaceful solution in Ukraine, the Russian Foreign Ministry said. “We still have a lot of geopolitical risk out there,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. The Paris-based IEA cut its projection for demand growth in 2014 by 150,000 barrels a day because of weaker performance in China and Europe, forecasting that worldwide consumption will expand by 900,000 barrels a day to average 92.6 million.Global Demand Global demand will increase by 1.2 million barrels a day, or 1.3 percent, to 93.8 million next year. The expansion is 165,000 barrels a day less than it predicted a month ago. “Demand is the big story here,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “Supply is so big but demand is not catching up. The IEA report is hitting Brent and the spread is going to continue to contract.” The agency lowered estimates for the amount of crude that the Organization of Petroleum Exporting Countries will need to produce by 200,000 barrels a day for this year and 300,000 a day in 2015.Saudi Arabia, OPEC’s biggest member, cut production by 330,000 barrels a day to 9.68 million in August, according to the IEA. The nation exported 6.95 million barrels a day in June. Output from OPEC’s 12 members slipped by 130,000 barrels a day in August to 30.3 million as lower production from Saudi Arabia and Iraq countered a recovery in Libya, according to the report. Saudi Arabia’s oil minister, Ali al-Naimi, said he’s not worried about the price decline. Oil prices “always fluctuate, and this is normal,” al-Naimi told reporters in Kuwait today. It’s too early to talk about the need for oil exporters to meet over prices, he said. via bloomberg