•Crude futures moved higher on Tuesday, hovering around the $91/barrel mark, as expectations that the US Fed could cut rates again on Wednesday lent support to equity markets, which in turn filtered through into the petroleum complex, sources said.

•"Petroleum futures markets are once again driven by equities, which are holding the market up...However, the Dow Jones index is only 10 points up, so we may see the US selling this market off later on," a London-based broker said. Analysts also said that the lack of fundamental headlines is mainly responsible for the strong correlation between crude futures and financial markets. "With little strong new fundamental news and lack of new disruptions, the correlation of WTI to equities remains exceptionally high and as the intra-day volatility is increasing on equities, the big red or big green printed on Wall Street becomes an increasing sentiment driver for oil," analysts for Petromatrix said in a report Tuesday.

•However, some fundamentals may return to oil markets later this week in the shape of the latest US weekly oil stock data, as well as the OPEC meeting Friday in Vienna. OPEC ministers will meet Friday in the Austrian capital to decide whether to change current output targets. The main message from OPEC in the run-up to the meeting has been that oil markets are adequately supplied with crude and that there is no need for an output increase.

Updated: January 29, 2008