U.S. crude futures fell below $70 a barrel on Tuesday and settled at $69.45 a barrel, following a stronger dollar against the basket of currencies and the fall in other commodities. U.S. Natural gas futures also traded lower despite the news of the formation of the Atlantic hurricane season's second tropical depression. The decline on MCX was less severe as the prices got support from the fall in rupee against the dollar.

IN FOCUS:.

Kuwait has lowered the official selling price (OSP) for its crude oil sales to Asian buyers for September by $1.50 a barrel to $1.50 a barrel below the average of Oman/Dubai quotes, a trader said.

The API data showed that U.S. crude stocks fell by 1.4 million barrels, against forecasts for a 700,000 barrel build. The U.S. Energy Information Administration will release its report on inventory today.

Mexico expects its basket of crude oil exports, a key source of government revenue, to fetch around $53 per barrel in 2010, Finance Minister Agustin Carstens said on Tuesday.

The U.S. National Hurricane Center said the depression formed over the far eastern Atlantic early Tuesday, but so far its current forecast track showed it remaining over the Atlantic away from the oil rich Gulf of Mexico.

FUNDAMENTAL OUTLOOK:
Crude oil prices may inch up on the back of a positive inventory report by EIA as we witnessed a drawdown in crude stocks in API report. Prices may also get support from the positive growth outlook by Fed and may rise in line with other commodities.