Oil climbed after U.S. crude inventories dropped the most in seven months and on speculation central banks will take steps to support the economic recovery

Futures rose as much as 1.3 percent after the U.S. Energy Department said stockpiles decreased 6.52 million barrels last week, the biggest decline since the seven days ended Dec. 16. Supplies were forecast to fall 1 million barrels. A Federal Reserve policy meeting ends today and the European Central Bank’s Governing Council gathers tomorrow.

Crude oil for September delivery rose to $89.20 a barrel on the New York Mercantile Exchange. Futures traded at $88.63 a barrel before release of the inventory report. Prices gained 3.6 percent last month and are down 11 percent this year.

Brent oil for September settlement increased 79 cents, or 0.8 percent, to $105.71 a barrel on the London-based ICE Futures Europe exchange.

Gold prices down pending the outcome of the meetings of the European Central Bank and U.S. Federal Reserve.

The Fed on Wednesday will report results of a two-day meeting. Analysts believe that the central bank will make it clear that he is ready to protect the flagging economy, but will refrain from aggressive action.

On Thursday the European Central Bank will announce the outcome of the meeting from which the markets are waiting for decisive action to save the eurozone.

Stocks of the world's largest gold ETF-secured fund SPDR Gold Trust, on Tuesday rose 3.32 tons, a decrease in July, more than 27 tons.

The cost of the August gold futures on the COMEX today fell to 1594.9 dollars per ounce.

Change % Change Last

Gold 1,618 -6 -0.39%

Oil 87.96 -1.82 -2.03%