-- Some traders in wait-in-see mode ahead of key events later this week, volumes low
-- Overall sentiment in the market is still negative, this rally likely to be contained, analysts say
-- Attention turns to euro zone meeting, which begins Thursday
LONDON--Crude oil futures traded higher Tuesday, but in a narrow range, as traders were cautious ahead of Thursday's European Union summit.
At 1058 GMT, the August Brent contract on London's ICE futures exchange was up 71 cents, or 0.8%, at $91.72 a barrel. The August contract on the New York Mercantile Exchange was trading up 15 cents, or 0.2%, at $79.36 a barrel.
Andrey Kryuchenkov, vice president of commodities research at VTB Capital, said oil's current rally was not likely to lead to significant gains as market participants were taking a breather ahead of this week's all-important EU summit in Brussels.
From the summit, market participants are hoping for some sort of timeline or definitive plan on the future of fiscal banking integration, he said. But for now, trading volumes are down as market participants are waiting on the sidelines.
"Brent managed to find some kind of support so it bounced back up, but don't expect sustained rebounds," he said. " We're not going to go higher than $93 and will just chill here."
Despite the move upward in European equities, the overall economic backdrop in the European Union is gloomy, said Myrto Sokou, analyst at Sucden Financial. Spain and the small island state of Cyprus this week became the fourth and fifth countries to request aid from the euro zone's bailout funds.
Meanwhile, investors are looking to U.S. data on consumer confidence and the Federal Reserve Bank of Richmond's survey on manufacturing activity due later Tuesday for cues on market direction. The American Petroleum Institute will also release its weekly survey on oil inventories in the U.S.
At 1059 GMT, the ICE's gasoil contract for July delivery was trading $12.25 higher at $820.25 per metric ton, while Nymex gasoline for July delivery was up 116 points at $2.6574 per gallon.
