Crude Recovers from Early Setback on Record Gasoline Demand

U.S. West Texas Intermediate and international-benchmark Brent crude oil settled higher on Wednesday after recovering from earlier losses that were fueled by a bearish private industry report. The catalyst behind the recovery was a report from the U.S. government showing a surge in U.S. fuel demand. The news was strong enough to offset a report that showed crude inventories did not fall as much as expected last week.

According to the U.S. Energy Information Administration, crude inventories in the United States fell by 1.5 million barrels during the week-ending July 28, traders were looking for a 3.8 million barrel draw down.

However, the report also estimated that weekly gasoline demand hit a record high 9.842 million barrels.

The EIA data also showed evidence of strong refinery runs that continued to boost demand for crude. Refinery crude runs rose by 123,000 barrels per day last week. Additionally, the report confirmed that distillate demand was running a solid 14.5 percent over the same period a year ago.

Gold

Gold futures posted a two-sided trade on Tuesday. Pressuring the market early in the session was a strong performance by U.S. equity markets which showed continued demand for higher risk assets.

Gold was able to recover earlier losses but remained slightly below a 7-week low at the close. The catalyst driving the rebound was another break in the U.S. Dollar to a 15-month low. The Greenback retreated after a private sector labor report showed fewer-than-expected new jobs in July, bringing into question the chance of a rate hike by the Fed later in the year.

Economic News

According to ADP and Moody’s, U.S. private employers added 178,000 jobs in July, this came in just below the 183,000 jobs estimate.

U.S. Equity Markets

All three major U.S. stock indexes managed to close higher on Wednesday. The rallies were primary led by the Dow Jones Industrial Average which broke above 22,000 for the first time. The Dow was boosted by Apple stock, which surged 4.73 percent after posting quarterly earnings results that substantially beat the estimates.

In other news, according to data from Thomson Reuters, for the calendar second quarter, 72 percent of the S&P companies that had reported as of Wednesday morning beat-bottom-line expectations and 68 percent on the top line.