WTI crude oil price rose 1.6% to settle at 63.45 as Saudi Arabia said that global economy is capable of coping with oil price at 75-80/bbl. On the data front, API showed that crude stockpile dropped more than anticipated while US' existing home sales showed strong gain in April. However, profit-taking ahead of OPEC's production decision sends price to 62.9 Thursday morning.

Ali ai-Naimi, oil minister in Saudi Arabia, commented that 'the price rise a function of optimism and better things are coming in the future'. He also believed that oil price will continue to rise and the economy is strong enough to support an oil price of 75-80/bbl. However, the comment has been disagreed by IEA which said that high oil price would be detrimental to economic recovery.

API reported that crude oil inventory dropped 2.82 mmb, compared with consensus of -0.43 mmb declines, for the week ended May 22 as driven by sharp rebound in refinery runs and low imports. However, both gasoline and distillate stockpiles came in worse than expected. Gasoline inventory drew 0.76 mmb which analysts forecast an above 1 mmb reduction. Distillate inventory gained 1.4 mmb, compared with consensus of a 1 mmb increase. The US Energy Department will report petroleum inventory today. Market expects crude stockpiles fell 1 mmb to 364.7mmb while gasoline inventories reduced by 1.3 mmb.

US' existing home sales surprisingly rose +2.85% mom to 4.68M units in April, compared with market expectation of +1.8% and -3% a month ago. Stocks in the US were however down. Dow Jones Industrial Average slid 2% to 8300 while S&P 500 Index lost 1.9%.

Gold price trades lower at 948 in Asian morning after closing flat in the previous day while silver gained 1.8% to settle at 14.87. 'Doctor Doom' Marc Faber said that he's sure the US will go into hyperinflation as 'the problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate'. He suggested buying as an inflation hedge, 'if you bought it in 1980 at the price of $850, then it hasn't been a good hedge against inflation, but if you bought it in 1999 at $251, then it has done very well'.