Net Longs in Crude Rallied - Decline in Stockpile Ignited Recovery Hope

Crude oil price changes little in European session as the market awaits the report by the US energy Department. Although probable decline in crude inventory supports price, firmness in USD and retreat in stock markets limit oil's gain. Currently trading at 78.88, the benchmark contract is largely flat from Tuesday's close.

Gold continues trading below 1100 as the dollar looks well-supported. In the near-term, the yellow metal's outlook is bearish but investors seem to remain optimistic on its long-term prospect.

Gold holdings in ETF Securities rose +0.4% to 7.8M oz yesterday from a day ago. At the same time, holdings in the SPDR Gold Trust also increased +0.1% to 36.4M oz yesterday.

The greenback is trading particularly strong against the yen as rate differential between the 2 countries is prone to widen if the Fed withdraw the easing measures. USDJPY rises to 92.2, approaching a 2-month high made in mid-October. Moreover, the dollar stays strong against the single currency - euro- and is set to record its first monthly gain since July.

After downgrades of Greece and Spain, the Wall Street Journals quoted the European Commission's warning that public finances in half of the 16 Eurozone nations are at high risk of becoming unsustainable. Ireland and Portugal are facing imminent risk of being downgraded as their financial conditions are worrying.

Equities in Asia and Europe pull back as affected by overnight retreat in the US market. In Asia, the MSCI Asia Pacific Index slid -0.5%. Japan's Nikkei 225 Stock Average lost -0.9% to close at 10546 as led by the slump of Japan Airlines which is on the verge to bankruptcy. In Europe, the UK's FTSE 100 Index dips -0.3% after soaring for 5 days and reaching a 15-month high at 5445.2 yesterday. Other European stock indices also fall with both of Germany DAX and France's CAC 40 losing around -0.7%.

Committments of Traders:

• Crude Oil: Net speculative long positions surged more than +20K to 75.3K. The rise was in tandem with price the rally which was driven by huge inventory draw
• Natural Gas: Net speculative short positions increased although gas price advanced to the highest level since January 2009. There's risk for further increase in net shorts in coming weeks should weather in the Midwest and Northeast turn moderate as gas storage remains at record high level
• Gold: Net speculative long positions declined to 238K last week as plummeted to the lowest in 7 weeks. As speculative length stays at record high level, long liquidation will continue in coming weeks. Moreover, strength in USD should weigh on the yellow metal
• Silver: Net speculative long positions rose after dropping for 4 consecutive weeks. Surge in new longs in spite of slide in silver price increased the rise of long liquidation in coming weeks
• Platinum: Net speculative long positions declined for the 3rd consecutive weeks. Rebound may see in the coming week as price recovers strongly after both the US and Japan released encouraging auto sales data.