By FX Empire.com

Crude oil prices rose last week amid optimism and hopes over the outlook of the European debt crisis, where traders were optimistic EU leaders will be able to reach a plan to ease the European debt crisis at next week’s EU summit. While the EIA report showed crude oil inventories fell last week by 4.7 million barrels, opposite to expectations of rising inventories, which further supported crude oil prices to rise last week.

The European debt crisis dominated most of the headlines last week, as uncertainty dominated the scene, yet traders were somewhat hopeful that EU leaders will be able to craft a deal that will ease the debt crisis in Europe and ease tensions in markets as well. Nonetheless, it all remains to be seen, as EU leaders gather next week for the EU summit.

Traders all around the globe will be eyeing the EU summit next week, where traders hope that EU leaders will be able to craft a plan that will ease the tensions in the euro zone area and help support debt-laden countries. Nonetheless, the level of uncertainty remains very high amid mixed reports last week that EU leaders are struggling to reach a final resolution, however, any solutions are not expected to be final and more work has to be done in order to stabilize conditions in the euro zone area.

The week is full of economic fundamentals from all around the globe, especially from the United States, where data on growth, income, spending, and inflation will be released next week, as the first GDP estimate for the third quarter will be released, in addition to the income report, where both reports are expected to show improvement.

Our overall outlook for crude oil prices remains to the downside, yet the data that will be released from the United States could play a major role in shifting the bearish outlook, where if the data comes out better than expectations, crude oil prices are likely to rise. Moreover, traders will be eyeing the EU summit and whether EU leaders will provide a resolution to the debt crisis inEurope, and failing to provide an effective solution will drive crude oil prices lower.

Highlights for this week that will probably affect Crude Oil direction are:

Monday October 24:

We don’t have any major fundamentals from the United States on Monday, which means that the focus is likely to remain on Europe, and whether EU leaders will be able to reach an agreement to solve the euro zone debt crisis.

Tuesday October 25:

The S&P/CaseShiller house price index will be released for the month of August at 13:00 GMT, where the S&P/CS 20 city house price index is expected to rise by 0.15%, compared with the prior rise of 0.05%, while compared with a year earlier, the S&P/CS Composite-20 index is expected to decline by 3.55%, compared with the prior drop of 4.11%.

The U.S. Conference Board will release the consumer confidence index for October, where consumer confidence is expected to improve slightly to 46.0 from 45.4 back in September.

Wednesday October 26:

The U.S. will release the durable goods orders for September at 12:30 GMT, where durable goods are expected to fall by 0.7%, compared with the prior drop of 0.1%, while durable goods excluding transportation are expected to rise by 0.5%, compared with the prior drop of 0.1%.

The U.S. will release the new home sales index for September at 14:00 GMT, where new home sales are expected to rise by 1.7% to an annual rate of 300,000 units, compared with the prior estimate of 295,000 units.

At 14:30 GMT, the EIA report for crude oil inventories will be released for the week ending October 21, where last week crude oil inventories decreased by 4.7 million barrels.

Thursday October 27:

The United States will start with the weekly jobless claims for the week ending October 21 at 12:30 GMT after last week they rose by 403 thousand, and expectations show jobless claims will fall to 400,000.

The U.S. Commerce Department will release the advanced Gross Domestic Product estimate for the third quarter of 2011, where the U.S. economy is expected to expand by 2.5%, compared with the prior expansion of 1.3% in the second quarter, as personal consumption is expected to rise by 1.9%, up from 0.7% in the second quarter.

The U.S. will release the pending home sales index for September, where pending home sales are expected to rise by 0.3%, compared with -1.2% in August, while compared with a year earlier, pending home sales are expected to rise by 10.8%, compared with 13.1% in the prior estimate.

Friday October 21:

The U.S. will release the income report for September at 12:30 GMT, where personal income is expected to rise by 0.3%, compared with the prior drop of 0.1%, while personal spending is expected to rise by 0.6% after rising by 0.2% in August. Core PCE is expected to rise by 0.2% in September, following the prior rise of 0.1% in August, while compared with a year earlier, Core PCE is expected to rise by 1.7%, up from 1.6% in the prior estimate.

The University of Michigan will release the final estimate for consumer confidence in October at 13:55 GMT, where consumer confidence is expected to rise slightly to 58.0 from 57.5.

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