|Analysis||Oil little changed on Tuesday trading ahead of the release of EIA report later in the day. Late on Tuesday the American Petroleum Institute (API) said Crude-oil inventories advanced 3.2 million barrels the week ended April 29, gasoline inventories soared 657,000 barrels and stockpiles of distillates retreated 1.5 million.|
The EIA Report is expected to show that the U.S. commercial crude oil inventories decreased to 2.0 million barrels from 6.1 million barrels the previous week.
Crude prices dropped in the previous two sessions on drop in equities and rebound in dollar. Equities in major economies fell yesterday on expected revenge attack by al-Qaeda after the kill of Osama Bin Laden by US forces.
On the other hand, the greenback managed to rebound from three-year low as the dollar index, which tracks the dollar movements versus a basket of major currencies, reached a high of 73.29 from the day's opening of 73.09. In fact, the rebound in dollar sapped demand on dollar-denominated commodities.
Yet, meanwhile oil prices might be affected more by the outlook of global recovery as the drop in US growth and the tight monetary policy adopted by China and other emerging economies is raising concerns that global recovery would wane this year.
Today, India raised interest rate to curb inflation which added to concerns after China's latest rise in borrowing cost. Also, the drop in Chinese and US manufacturing data for April aroused skeptics.
Later in the day, eyes will be on services sector in the euro zone followed by the United States, where expectations refer to stagnation in expansion at 56.9 in the euro area and rise from 57.3 to 57.5 in the US.