What's Moving the Oil Markets?

•IPE Brent futures in London were rangebound Tuesday after recovering from steep drops Monday following news Monday that the Iranian President Mahmoud Ahmadinejad had sent a letter to US President George W. Bush proposing ways the two countries can resolve their differences.

•However, a price rally occurred late in the day as the White House said the letter did not change its position on Tehran's nuclear program. "The slight rise this morning is a continuation of the bounce we saw yesterday evening. The comments made by Condoleezza Rice about the Iranians stalling for time by sending the letters provided a bullish end of day rally," a trader said.

•With a lack of fresh fundamental news early Tuesday, the market is slowly starting to look towards the latest round of US stock data due out Wednesday. "I think we may be seeing a few builds. With mild weather and increased refinery runs in the US one would expect to see increases in gasoline and distillate inventories," one broker said, cautioning though that "the market should not get carried away on the bearish side yet."