Oil price rallied to as high as 45.54 Wednesday after the US Energy Department report a better- than-expected petroleum inventory report which showed that crude oil stockpiles rose 0.55 mmb last week (Bloomberg survey: +1.45 mmb). However, the benchmark contract then retreated 4% due to profit-taking. Today, oil price continues to trade around $43/bbl as investors still concern about demand issue.

From another report Wednesday, the US Energy Department said that fuel consumption in the nation dropped 3.7% during the 4 weeks ended Dec 26. Although the Labor Department reported better-than-expected initial jobless claims figure of 492 K, it's interpreted as being skewed by Christmas holiday but not improvement in the job market. In fact, the number of workers continuing to claim benefits surged to 4.506M, the highest level since December 1982. Later today, the Eurozone and the UK will report manufacturing PMI index in December which are expected to have deteriorated further and signaled further contraction in 4Q08 GDP.

In Gaza, the Israeli troop killed a Hamas leader in an air strike, making the war in the region longer instead of short because the Palestinians will likely revenge. Also, news reported that while the Islamic movement said yesterday that it would accept a ceasefire if Israel agreed to lift the blockade of Gaza and open all border crossings, Israel said it would only stop if there's an unconditional end to rocket fire.

Stock markets in Asia rise on the first trading day of 2009, led by commodity and telecom shares. The MSCI AP ex Japan Index added 0.1% while Hong Kong's Hang Seng Index rose 2%. ‘King of Commodity' Jim Rogers said he's buying Chinese companies despite slowdown in China's economy.

Gold price closed 1.6% higher at 884.3 Wednesday but pulled back a bit today. The dollar index is expected to have found a temporary bottom at 77.7 on Dec 19 and subsequently rebound to 83/84 is likely. Today, the greenback rose against the Euro as the market awaits the manufacturing PMI report. Considering a broad picture in 2009, gold should outperform given weaker dollar. Global trend of near-0% interest rate reduces the opportunity cost of owning gold. Moreover, geopolitical tension combined with economic uncertainty will likely increase demand for safe assets.