Source: The Canadian Press

The Toronto stock market could find some early lift from the resource sector as oil prices rose on expectations of a further slide in American inventories.

U.S. futures also headed higher before some key economic data with the Dow Jones industrial futures ahead 54 points to 10,195, the Nasdaq futures were up 11 points to 1,857.5 while the S&P 500 futures gained 6.3 points to 1,092.5.

The Canadian dollar was higher, up 0.36 of a cent to 97.21 cents US.

The July crude contract on the New York Mercantile Exchange rose 55 cents to US$75.67 a barrel.

Oil traders have been encouraged in recent weeks from a fall in U.S. crude inventories, which suggests demand is improving.

Analysts expect another drop of 1.8 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. The American Petroleum Institute announces its weekly supply data late Tuesday while the Energy Department’s Energy Information Administration releases its report on Wednesday.

The August bullion contract on the Nymex advanced $1 to US$1,225.50 an ounce.

And July copper in New York was unchanged at US$2.99 a pound following five days of sharp gains, as data from China showing rising exports encouraged demand prospects.

Economic news could help direct trading. The U.S. government is expected to release figures on import prices for May while the U.S. Federal Reserve will release a manufacturing update from the U.S. Northeast. And the National Association of Home Builders’ housing market index is due during afternoon trading. The index tracks industry confidence.

Markets had enjoyed a surge through the first half of Monday’s session following better than expected industrial production data from Europe but indexes faltered late in the afternoon after credit rating agency Moody’s cut its rating on Greece’s debt to “junk” status. The TSX added four-tenths of a point while the Dow industrials stepped back 20 points.

On the corporate front, British Sky Broadcasting has rejected a buyout offer from Rupert Murdoch’s News Corp. that values the company at 12 billion pounds (US$17.7 billion).

BSkyB said it would consider a sweeter offer, which some analysts expect to be forthcoming.

The optimism over renewed corporate deal-making helped offset weak economic data in Europe.

German investor confidence fell sharply in June on worries about the persistent debt crisis in the 16 countries that share the euro as well as the impact of spending cuts by European governments, according to a survey by the ZEW institute.

The index sank to 28.7 points in June from 45.8 in May, its lowest level in more than a year.

“June’s drop in German ZEW investor sentiment is another sign that fears about peripheral debt are damaging sentiment towards core euro-zone economies,” said Jennifer McKeown, senior European economist at Capital Economics Ltd.

London’s FTSE 100 index rose 0.38%, Frankfurt’s DAX was up 0.49% and the Paris CAC 40 gained 0.5%.

Tokyo’s Nikkei 225 stock average was up 0.1% and Hong Kong’s Hang Seng added 0.1%.

Elsewhere, benchmarks in Australia, Thailand and South Korea were down. Financial markets in mainland China were closed for a holiday.

In other company news, ratings agency Fitch has downgraded BP on Tuesday because of worries about the continuing Gulf of Mexico spill. Fitch Ratings downgraded BP’s long-term issuer default rating and senior unsecured rating to BBB from AA, saying it was concerned by reports from U.S. government scientists that the volume of the spill was significantly larger than previously indicated, and it was also worried by pressure from U.S. officials on BP to pay billions of dollars into an escrow account to guarantee payment of cleanup costs.

Pacific Rubiales Energy Corp. (TSX:PRE) has received its state-owned partner’s approval to expand the commercial area of their Rubiales field in Colombia, the Canadian oil and gas company announced Tuesday. The field, which is jointly owned by Pacific Rubiales and Colombia’s state-owned Ecopetrol SA, currently produces approximately 122,500 barrels per day.