U.S. crude prices fell sharply on Tuesday, but ratcheted upward overnight ahead of the week's U.S. Energy Department inventory report release.

Summer's winding down and with it, demand for gasoline. Wholesale unleaded gasoline blendstock prices have dipped 7 percent since the end of June, as inventories have risen to five-month highs.

There's a surprising embarrassment of riches, er, petroleum, in domestic stockpiles according to the latest government figures. This morning, the U.S. Energy Department's weekly inventory report showed across-the-board buildups in input crude oil supplies levels as well as stocks of finished products.

It was all much ado about nothing this morning. A definitive report from the U..S. Energy Department showed domestic inventories of crude oil fell by 800,000 barrels last week, skunking industry guesses and surprising analysts.

Oil industry and Street forecasts for a decline in the nation's crude oil stockpile were outdone this morning when the U.S. Energy Department announced a 3.0-million-barrel decrease in overall supplies. The off-take reduces the domestic commercial stash of crude now to 355 million barrels.

Crude oil's been an exciting market over the past couple of weeks. Since the September WTI contract became the NYMEX lead dog on July 21, Texas Tea has climbed 5.4 percent. That gain's been trumped, however, by a 6.6 percent appreciation in the price of October heating oil. Lest you think pump prices at your neighborhood fill-up spot are careening upward, the wholesale price for an October delivery of unleaded gasoline blendstock has risen only 4 percent.

This week, oil analysts believed U.S. crude oil inventories would fall as the result of slipping imports and Tropical Storm Bonnie-induced production interruptions. Most, however, didn't foresee stockpiles being drawn down as much as the government reported this morning.

A big surprise party was thrown by the U.S. Energy Department this morning when its weekly petroleum inventory report was released. Bears, rather than the bulls, did most of the celebrating, however.

If you watched the overnight price trend in U.S. crude oil futures, you could see traders' mindset changing as they approached the time for the Energy Department's weekly inventory report. Prices have been well-bid and rising after Tuesday's higher close and a broad consensus among analysts and industry insiders for an impending drawdown in crude oil stocks.