WTI crude oil rebounded after sliding to 48.55 and closed at 49.92 Tuesday. In Asia today, price trades within a narrow range below 50 as the market awaits the US inventory report.

The API inventory report released Tuesday showed higher-than-expected gain in crude and distillate stockpiles for the week ended April 24. More than doubling consensus of 1.83 mmb, crude stock rose sharply by 4.58 mmb to 374.8 mmb as refinery runs dropped 0.14 mmb. Inventory at Cushing also added 0.35 mmb. Distillate stocks increased by 1.58 mmb, compared with market expectation of 0.81 mmb as demand plunged by 0.27 mmb to 3.95 mmb, failing to be offset by decline in imports. Gasoline inventory, on the other hand, drew 2.56 mmb (consensus: gain of 0.1 mmb) due to fall in imports and lower refinery runs. However, we cannot deem this as a bullish sign as demand also dropped quite significantly during the week.

The US Energy Department's report today will likely show the 8th consecutive weekly increase in crude inventory. According to Bloomberg survey, analysts forecast crude oil stockpiles would have added 1.8 mmb to 372.4 mmb. For refinery products, both gasoline and distillate are also anticipated to have stock build during the week.

On the macro front, swine flu news remains to dominate the commodity market and until the situation stabilizes, investors' sentiment will continue to hurt oil price. Later today, the US will report 1Q09 GDP which probably contracted -4.7%, compared with -6.3% in the previous quarter. The slowdown in decline was driven by higher consumer spending, despite rising unemployment and lower household wealth, due to lower taxes and higher government's transfer payments.

OPEC's production cut remains in progress. As a commitment to the assigned quota, Abu Dhabi National Oil Corporation in UAE will slash crude supply to Asia by 18% in June after a 15% cut in May. However, the market would probably ignore this for the moment as the theme for playing oil currently is demand. Oil consumption has been deteriorating more rapidly than supply and investors concern that the outbreak of swine flu will aggravate the situation.

Gold price retreated for the second day and closed 1.6% lower at 893.6 Tuesday. Increase in economic uncertainty failed to lift price as investors ran to the USD and Japanese yen as safe-haven assets. Hopes on rally in physical demand in India on festive season also disappeared after report showed that gold sales during the Akshaya Tritiya festival probably declined 20- 40% from a year ago as 'high' gold price and economic slowdown constrained spending. Silver and platinum price plunged 4% as their characteristics of 'industrial metals' once again outshone that of precious metals.

For platinum, selloff was led by concerns on the auto market. US automakers approach a deadline tomorrow on government funding. Chrysler may need restructuring to avoid going bankrupt while GM may be over 50% owned by the US Government so as to overcome its debts. However, these are subject to final decision of the White House.