Oil price recovered after falling to 2-week low at 66.25. However, strong resistance was seen above 70 level and the August contract eventually close at 69.24, +2.6%. Triggering the rebound was decline in USD which plunged -1.8% against the euro amid speculations that the Fed will reaffirm the stance of keeping its policy rate low for a long period of time. Industry report from API once again disappointed the market by showing another week of huge increase in gasoline stockpiles. Crude oil inventory drew less than forecast. Nymex gasoline rose +1.8% to 1.89 after tumbling for 2 days.

Crude inventory dropped -0.07 mmb, compared with consensus of -1.12 mmb, to 356.6 mmb, for the week ended June 19 due to decline in imports together with increase in refinery runs. Gasoline stockpile rose +3.69 mmb to211.4 mmb as demand dropped by 0.42 mmb to 9.31 while imports rose +0.21 mmb. Gasoline production also surged during the week. Distillate stockpiles also rose more than expected by +2.34 mmb to 153.9 mmb as driven by rise in import accompanied with sluggish demand.

Currently trading at 68.5, the black gold will continue hovering around this level as investors await the report by US Energy Department which will probably show another week of addition of gasoline stockpile. The rate of increase is however expected to be lower.

After the 2-day FOMC meeting ends Wednesday, Chairman Ben Bernanke will probably announce to maintain the target rate at 0-0.25% and state that the current $300B asset buying program remained in progress. The Fed will also reinforce that interest rates will stay low for a long period of time despite some green shoots appeared. Apart from euro, the greenback also retreated against the pound, Canadian dollar and the Aussie as the likelihood of an early rate hike dissipated.

Pullbacks in the dollar also boosted precious metals. Gold for August delivery edged +0.4% higher to settle at 924.3 after sliding to 6-week low 913.2. The silver contract also gained +1% to 13.85.having little change in Asian session today, the precious metals may continue consolidation with mild upside bias today, before the release of FOMC statement.

Bullion holdings in SPDR Gold Trust dropped slightly to 1131.24 on June 23, the first change since June 5. The reduction in holdings suggested investors' interest in gold has decreased as the precious metal will need to struggle in the near-term as improved US economic data triggered speculations on Fed tightening.

Platinum was the only one that dropped among the precious metal complex Tuesday. Slipping -0.3% to 1165.4, the noble metal is expected to suffer from weak fundamentals in auto industry. Although potential supply disruption in South Africa and anticipated launch of ETF is the US have supported price, there are signs that investment demand has reduced. Over the past 2 sessions, the platinum ETF products have dropped by more that 5K oz from its peak