Crude oil is moving higher today in attempts to erase yesterday’s losses after US oil inventories rose unexpectedly which indicated that the world’s biggest oil consumer is not accelerating its consumption levels.

The EIA report showed that U.S. commercial crude oil inventories increased by 4.2 million barrels from the previous week compared to the previous reading at 3.6 million barrels. At 338.9 million barrels, U.S. crude oil inventories are in the upper limit of the average range for this time of year, while distillate fuel inventories increased by 0.1 million barrels last week and are in the middle of the average range for this time of year.

The effect from the inventories rise countered strong manufacturing figures from China, Euro zone, Germany and UK, where optimism appeared in Europe after these data along with declining borrowing costs for Euro members, especially Portugal.

The Iranian tension remains general upside support, yet we can see the threats losing momentum after the IAEA said that nuclear talks progressed well and will be returning for more talks soon, which somehow further stripped crude on support yesterday.

The weakening dollar yesterday couldn’t counter the inventories’ negative effect despite that the dollar declined sharply, as it opened yesterday’s session at 79.29 and settled at 78.89, where it opened today’s session at 78.88 and continued to trade around these levels after it recorded a low of 78.71.

On the other hand, Russia, the world’s largest oil producer, crude output climbed to 10.36 million barrels a day last month from 10.21 million barrels a day in January 2011, which is 1.4% increase, according to preliminary data from the Energy Ministry’s CDU-TEK unit.

In Europe, optimistic investors nowadays are waiting for decisions or a deal between Greece and its private bondholders where hopes are seen in markets that a deal would be reached within couple of days with possibility of more haircuts for investors and lower interest on newly issued bonds, which help the country to stand up despite its high debt.

At the current time period, financial markets are closely monitoring companies’ results, as in the earning season markets’ focus would be on companies’ results that reflect the health of their economies amid current challenges that face economies.

Today, auctions from Spain and France are due, where Spain would sell around 5 billion Euros of 3, 4, and five years maturities, and France will sell around 8.5 billion Euros of even longer maturities, where these auctions will be highly monitored as it reflects the current sentiment and investors’ confidence.