West Texas Intermediary crude oil prices for the month of September contract are trading near $88/bbl with loss of more than 0.20 percent. Today is a very crucial day for oil price movement as inventory data from DOE and FOMC rate decision are awaited by investors.

The American Petroleum Institute reports that crude oil stocks have fallen drastically by more than 11 million barrels per day due to huge fall in import, i.e. by 8 million barrels per day. Likewise, the US Energy department, crude oil stocks are likely to decline with a slower pace of fall in petroleum stocks.

Despite falls in oil inventory, crude oil futures are trading under pressure ahead of FED meeting and statement later today. Rising consumer confidence in US have also created a doubt on Fed easing today.

South Africa has also reported lower Iranian crude oil imports in the last month. OPEC reported a fall in overall production, with the largest drop in Iran oil production in July.

Manufacturing activities has shown an ongoing slow down in China, the second largest oil consuming nation. This morning's release of HSBC and Chinese PMI data was discouraging, showing a continued weakness in this sector. China's official purchasing managers' index (PMI) showing that manufacturing activity fell to an eight-month low in July.

The Chinese PMI was a little bit under what people were expecting. Markets continue to wonder if China's soft landing has landed, after a bank official last week warned that Chinese GDP will fall to 7.4% for the year.

PMI numbers for manufacturing sector of German and Euro –zone are due for today. Contraction in US manufacturing sector is also expected which may weigh on oil prices due to rising concern of lower fuel demand from manufacturing sector.

Natural gas continues to surprise speculators. Yesterday saw investors selling off to take profits for the end of the month, but gas prices jumped right back to trade above $3.22/ MMBTU with gain of 0.45 percent this morning.