Oil fell on Tuesday after hitting a 2009 high as bulging oil inventories and falling energy demand outweighed fragile hopes for an economic recovery. Natural gas futures ended lower on Tuesday, as moderate weather forecasts, growing supplies and softer crude prices weighed on the complex despite a strong run up in the previous two sessions.

A U. S. Energy Department report today may show that crude- oil inventories increased 2.5 million barrels last week as refiners produced less fuels on weaker demand for gasoline and diesel. Oil fell yesterday as U. S. equity markets dropped for the first time in three days.

Industrial demand for gas will decline 7.4 percent this year as factories close and demand slumps for steel, chemicals and plastic, the Energy Department predicted in a report on April 14. Manufacturers accounted for 29 percent of demand for gas in 2008.

Investors are waiting for stress test results and fresh reports that some of the banks might require more capital is sending some negative vibes into the market.

For Crude oil we believe, the strategy should be buying at dips. Any major draw ininventory can take crude oil above $55 per barrel.

Natural gas corrected after a good run yesterday and the upward trend continues. We recommend buying natural gas at dips for the day.