On Tuesday, U. S. oil prices settled down $1.91 as economic concerns sent investors into safer havens, outweighing positive U. S. manufacturing and home sales data and Natural Gas prices crashed following downturn in energy complex.

Tropical Storm Erika formed in the Atlantic Ocean east of the Caribbean's northern Leeward Islands on Tuesday and could become a hurricane, the U. S. National Hurricane Center said. The storm's most likely track would see it avoid the Gulf of Mexico oil patch and take it north of the Caribbean islands, just east of the Bahamas on a curving path towards the U. S. east coast, the hurricane center said.

Crude oil EIA inventories are likely to show drop in crude oil stocks by 600000 barrels and gasoline stocks are also expected to decline by 600000 barrels, crude oil refinery utilization would be interesting to see.

Crude oil prices dropped in line with fundamentals as the supply was not a concern in crude oil market, major factor in crude oil was demand, supply were seen outpacing demand and OPEC stricter OPEC compliance is not followed by some of its members

We do not see a major upside in crude oil prices during the day. Though it may move slightly up following the surge in equities, the fundamentals from the demand point of view still remain weak. One should be cautious in going long in crude oil in fact we believe rallies of 1-2% shall be used as good selling opportunity.