U. S. crude futures hovered above $60 a barrel on Tuesday and settled at $60.1, more than a percent rise from the previous day close as a flurry of refinery problems stoked supply fears at the start of the U. S. summer driving season.

U. S. natural gas futures slid by Rs. 9.1 on MCX and ended the day at Rs. 187. It also fell slightly on NYMEX pressured by mild spring weather and growing supplies.

Sunoco said on Tuesday that firemen put out late Monday a fire that hit the ethylene plant at its 178,000 bpd refinery in Marcus Hook, Pennsylvania, on Sunday. Sunoco will increase output at Philadelphia and New Jersey refineries to make up for production lost at Marcus Hook.

The American Petroleum Institute reported a larger-than-expected, 4.5-million-barrel drop in U. S. Crude oil inventories, as crude oil imports remained low for a second consecutive week, apparently offsetting a 1.3 percent drop in refinery operating rate.

The API said that for the week to May 15 gasoline stocks dropped 5.4 million barrels to 206.2 million barrels and distillate stocks, which include heating oil and diesel fuel, rose 1.4 million barrels to 145.8 million barrels.

Unrest in OPEC-member Nigeria continued. Nigerian security forces clashed with militants on Tuesday close to an oil flow station in the western Niger Delta operated by U. S. energy giant Chevron, an army spokesman said.

A fluid catalytic cracker was shut down at the 288,126-barrel-per-day refinery as a result of the fire, but no other units was shut, a spokesperson for the Texas Commission for Environmental Quality said.

Crude oil: Crude oil still looks firm and trading strategy should be buying at dips as fire in a Gasoline unit at Flint Hills Resources, producing 2, 80,000 barrels per day, seems to be supporting crude oil prices. We recommend buying crude oil futures at dip during the day as the bias is on upside. A big draw in gasoline inventory can take crude oil futures to new highs.

Crude: Crude prices have witnessed a new high of $ 60.99 in the July contract on NYMEX yesterday. However, impact was lower in Indian markets due to stronger INR. The Pull back in crude looks positive for crude. Also good volumes are seen coming in the June Contract on MCX. The RSI also witnessed cross-over on upside. Thus, during the day one can remain long in Crude between 2880-900 levels, targeting 2950 and 2975, with a Stop loss of 2850.

Natural Gas: Natural Gas prices have seen continues down-fall from the top (232). It even breached the 196 levels (61.8% retracement level). Thus natural Gas is expected to fall further for the day till the support at 186 levels.