Crude oil changed little after retreating from a six-month high of $60 a barrel this week on concern that the global economic recovery may falter.

Natural gas futures fell in New York after U. S. government reports indicated that demand for the fuel was showing few signs of rebounding during the recession. Gas stockpiles rose 95 bcf in the week ended May 8 to 2.013 trillion cubic feet.

Oil gave back its earlier gains after a report on May 13 showed a weaker-than-expected drop in U. S. retail sales, raising concern that the recession may be prolonged. Crude also slid as the International Energy Agency yesterday forecast the biggest contraction in world oil use since 1981.

According to the IEA report total U. S. daily fuel demand averaged 18.2 million barrels in the four weeks ended May 8, down 7.9 percent from a year earlier. Gasoline demand averaged 9 million barrels in the same period, down 1.2 percent from a year earlier. The IEA cut its 2009 demand estimate to 83.2 million barrels a day this year, down 3 percent from 2008. That’s 230,000 barrels a day lower than last month’s forecast.

U. S. crude-oil supplies dropped 4.63 million barrels to 370.6 million and Gasoline stocks fell 4.15 million barrels to 208.3 million in the week ended May 8.

Additionally, Industrial consumption of gas may tumble 8 percent this year because of the recession. Overall U. S. consumption is expected to contract 1.9 percent, outpacing reductions in output by almost twice as much.

Crude oil futures are expected to improve today after positive hints from the inventory. Crude is expected to move side till
2990-3000 levels.

While Natural Gas is expected to improve today, however breaching 212 levels in Natural gas can push the prices downside.

Crude: Crude prices moved downside in the previous session till our target of 2830. However, crude did not breach the support levels yesterday and showed a positive sign in closing by a pull back. Thus, crude can move positive during the day above the
2880 levels. Thus, one can remain long in crude above 2880, targeting 2950 and 2985.

Natural Gas: Natural gas moved downside in the previous session breaking the support at 212 levels. Also the RSI indicates downside cross-over of RSI with MA, thus negative for prices. Thus one can remain short in Natural below 212, target 205-203.