AnalysisOil rebounded slightly after dropping for two days as the U.S. dollar pared some of yesterday's gains, giving the chance for commodities to incline.

Price movements are still within narrow range after oil has dropped the most in a month on Monday ahead of the release of important reports. The API weekly report will be released later on today, while the EIA report will be due tomorrow. On the other hand investors are awaiting U.S. consumer confidence for October and U.S. GDP that will be released on Thursday.

The economic data released this week from the world's no.1 crude consumer will determine the next direction for oil whether it will rebound again to one-year high above $81 a barrel or it will retreat to $70 levels. OPEC mentioned that it will increase production if prices reached $100 a barrel.

Yesterday, oil slipped as the dollar strengthened against majors as it rebounded from its lowest level in 14 months versus a basket of major currencies as indicated by the dollar index. The six currency index closed at 76.02 from the opening at 75.44; however, it plunged today to 75.85.

 Moreover, oil prices failed to gain support from equities which tumbled in the U.S. and Asia. Wall Street fell as investors sold shares of financial companies and homebuilders. Meanwhile, there are concerns and a slowdown in recovery after the fast paces seen recently.

Now, oil is traded at $75.87 recording a high of $76.11 and a low of $75.75, whereas the contract on Monday shed $1.82 closing at $78.68, while recording a high of $81.58 per barrel and a low of $77.97 per barrel.