Crude Oil Mixed after Gasoline Drawdown Offsets Surprise Build in Crude Inventories

September Crude Oil posted a two-sided trade on Wednesday following the release of a government oil report that showed a big decrease in gasoline stockpiles and an offsetting surprise build in crude inventories.

According to the U.S. Energy Information Administration, U.S. commercial crude inventories rose by 1.1 million barrels to a total of 523.6 for the week ended August 5. Gasoline stockpiles fell 2.8 million barrels.

Analysts were looking for a drawdown of about 1 million barrels in both domestic crude and gasoline inventories. Late Tuesday, the American Petroleum Institute (API), reported a build of 2.1 million barrels in crude and a drop of 3.9 million barrels in gasoline.

The EIA also reported a drop in distillate fuel stocks of 2 million barrels. The report also showed U.S. oil production was just about flat at 8.4 million barrels per day.

September Crude Oil futures were trading at $42.52, down 25 cents from Tuesday’s settlement. International benchmark Brent crude futures were down 15 cents at $44.83 per barrel.

Precious and industrial metals were sharply higher, mostly in reaction to the weaker U.S. Dollar. Recent accommodative activity by a number of central banks has been supporting gold prices. Today, the market received an additional boost on fears the economy could slip into a period of slow growth, thereby, dampening the central bank’s willingness to raise interest rates.

December Comex Gold was up about 0.30 percent at $1345.00 an ounce. September Comex Silver was up nearly 2.0% at $20.19 an ounce.

The story in the metals today was in the Platinum and Palladium markets. October Platinum futures surged 2.44 percent at $1178.10 after touching $1191.70, its highest level in over 17 months. September Palladium reached a 14-month peak at $723.00. Like gold and silver, the initial rally in platinum and palladium was triggered by the weaker dollar. However, much of their rally was being attributed to thin trading activity and protective buy stops.

The British Pound recovered some of its losses from Tuesday, but renewed shorting pressure kept a lid on any substantial price rise. Most U.K. gilts also rose, after the Bank of England failed to meet its bond-buying target in its revived asset-buying program. The Bank fell £52 million short of its target to buy £117 billion of gilts on Tuesday, the second day of the revived program.

The EUR/USD rose on Wednesday. Germany’s 10-year bonds fell 1.5 basis points to minus 0.16 percent, while 30-year bond yields were 2 basis points lower at 0.41 percent. German yields fell in sympathy with the BoE’s inability to meet its bond-purchase target.