NewsCrude oil trades narrowly ahead of the critical economic events, EIA weekly report
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AnalysisCrude oil continues to trade narrowly within a sideways range, yet slightly biased to the upside ahead of the EIA crude oil inventories report and also ahead of the growth data from the United Kingdom and the Federal Open Market Committee (FOMC) rate decision.

Crude oil futures for June settlement opened the session today in Asia at $103.73 per barrel, recording so far the highest at $103.81 and the lowest at $103.60, and are still trading narrowly at $103.68 now.

Oil most probably will extend the gains recorded this week as the commodity gained momentum after the American Petroleum Institute clarified that crude inventories dropped in the world's largest economy and largest consumer of oil, where the commodity advanced, affected by demand and supply forces.

Moreover, Crude is expected to rebound today as the Arabian Gulf, the largest producer of oil in Libya, warned that it might stop producing oil temporary due to the wide protests seen in Libya, according to Libya News Agency. A spokesman for the company was quoted saying that the protests might block the entrance to the firm's offices. Therefore, production at oil fields might remain frozen.

Today, eyes will track the inventories report from the Energy Information Administration (EIA), with expectations inventories at the largest consumer of oil worldwide might drop sharply as the pace of recovery started to accelerate as seen in the market, where demand forces increased, while supply almost remain unchanged, indicating that despite the slowdown in Europe the U.S. economy is walking steadily towards growth and recovery.

Inventories in the U.S. could have dropped significantly in the week ended on April 20 to 2.8 million barrel from the previous of 3.9 million barrel recorded a week earlier.

During the European session, growth data from the royal economy will pull all the attention, with expectations the United Kingdom could have grown and expected by 0.1% in the first quarter of 2012, recovering slightly from the contraction seen in the fourth quarter of 2011, when the economy shed 0.3%.

Confirmed growth in the United Kingdom might add optimism to the market, pushing crude to the upside, where in case the royal economy expanded in line with expectations or better, the sentiment will improve an expansion at U.K. might indicate that the recession in Europe is still mild, while other indebted nations might recover and grow in the first quarter despite the increased tension seen in the debt market, providing another reason for crude to rebound.

Moreover, all the attention will shift to the Federal Reserve during the U.S. session, where markets are waiting for FOMC rate decision for more details what policies might be adopted for the recovery to continue in U.S., the largest consumer of oil. Therefore, crude might be affected sharply by any new easing provided by policy makers in U.S.