Crude oil settled up 1.49% at 5672 after hitting an overnight session low of 5551 a barrel on Monday rebounded after industry data on U. S. stocks showed a sizeable drawdown in the past week. Prices moved off nine-month lows brushing off weak Chinese import data and Friday's soft U. S. jobs report on hopes weekly supply data will reflect solid demand in the world's largest consumer of crude. The API said late Tuesday that last week crude stocks fell by 1.9mbls, gasoline inventories rose by 719kbls, and distillate supplies rose by 1.7 mbls.

Market expect the U. S. Department of Energy to report crude stocks fell 1.114 mbls last week and distaillate stocks rose 571kbls, while gasoline stocks eased 157kbls with the actual figures due later Wednesday. Also on Tuesday, the U. S. EIA lowered its forecasts for oil prices in 2014 and 2015, reflecting higher U. S. production estimates and lower global demand expectations. US production hit 8.6 mbls a day in August, the highest monthly level since July 1986, the EIA said. The agency projects average production of 9.53 mbls a day in 2015, the highest since 1970.

Prices have tumbled since mid-June, as violence in a number of global hot spots hasn't caused an interruption in oil supplies and demand has been tepid, particularly in Europe and Asia. Brent contracts for delivery in late 2014 and 2015 are more expensive than the front-month October contract, indicating that traders think the market is amply supplied. Overnight, oil prices moved off nine-month lows, brushing off weak Chinese import data and Friday's soft U. S. jobs report on hopes weekly supply data will reflect solid demand in the world's largest consumer of crude. Technically market is under short covering and getting support at 5610 and below same could see a test of
5549 level, and resistance is now likely to be seen at 5720, a move above could see prices testing 5769.

Trading Ideas:

Crudeoil trading range for the day is 5549-5769.

Crude oil prices rebounded brushing off weak Chinese import data and Friday's soft U. S. jobs report on hopes of solid demand.

Investor bet that a global supply glut has been now priced into trading, which allowed crude prices to rise ahead of weekly U. S. supply data.

The API said last week crude stocks fell by 1.9mbls, gasoline inventories rose by 719kbls, and distillate rose by 1.7mbls.