Energy Trading Update and Market Outlook: Nirmal Bang

crude oilU. S. crude oil futures edged higher on Tuesday, lifted by a weak dollar that helped boost commodities and as optimism about economic recovery and corporate earnings sent equities higher, providing further support to crude oil.

The API said that crude stocks fell 254,000 barrels in the week to Oct. 2, against the forecast for a 2.2-million-barrel increase in a poll of analysts.

A British newspaper reported that Gulf Arab states were in secret talks to abandon the U. S. currency in oil trade. Big oilproducing countries denied the report.

The spread between the current front month and the five-year forward crude contract ended at $13.03, slightly below the $13.05 close on Monday. The November 2014 contract settled on Tuesday at $83.91, up 45 cents, or 0.54 percent.

U. S. retail gasoline demand last week jumped 7 percent from the same period last year and rose 0.6 percent from the previous week, according to a MasterCard SpendingPulse report released on Tuesday.

The EIA raised its forecast for 2010 OPEC crude oil output to 29.19 million bpd from its prior estimate of 28.89 million bpd. The EIA also raised its projection for non-OPEC output to 50.26 million bpd from 50.19 million bpd.

Crude oil prices are supported by weaker dollar and rise in equities. Tonight we have inventory report from EIA. Any decline in distillate, heating oil or crude oil stocks may cause upside in crude oil and natural gas futures.