The American Petroleum Institute said that the US inventories dropped by 6.8 million barrels last week. Some investors will be monitoring for inventory data from the Energy Department’s Energy Information Administration for more signs crude demand may be growing. Economic analysts are expecting the EIA numbers to fall 2.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The API numbers are reported by refiners voluntarily while the EIA figures are mandatory.

The New York-based Conference Board honestly said its consumer confidence index dropped in June after gaining it for the last three months.

Senior commodity strategist “Mark Pervan” said that the oil right now is very short-term news to sensitive market. “The inventory data is giving people a reason to buy today.”

He also said “Oil prices will likely go down between 10 percent and 15 percent during the third quarter as the global economy remains sluggish and the dollar strengthens. Prices will probably then rebound in the fourth quarter by about 20 percent.”

“I sense this quarter will be a breather,” Pervan said. “It won’t be a major pullback, but it will be a pullback.”

Oil increases 41 percent in the second quarter and 57 percent in the first half on investor optimism that the worst of a severe US recession was over. Commodities such as oil also rallied on a weaker US dollar, as investors sought a side step against inflation.

In other Nymex trading, gasoline for August delivery was steady at $1.90 a gallon and heating oil held at $1.72. Natural gas for August delivery jumped 4.1 cents to $3.88 per 1,000 cubic feet.