Oil price trades narrowly Monday in Asian session as investors are taking a breath after last week's sharp selloff. WTI crude oil for February delivery will expire tomorrow and its $6/bbl discount to March's contract encouraged investors to buy and store oil, increasing oil inventory. Trading is expected to remain thin throughout the day as there will not no floor trading in the US due to Martin Luther King Day holiday.

Stock markets rose in Asia as led by commodity and financial sectors. The MSCI Asia Pacific Index gained 0.2% while Nikkei 225 Stock Average added 0.3%. Japanese export stocks also advanced as Japanese yen weakened. Later today, the UK government will propose insurance to underwrite mortgage-backed debt and problematic assets. The government may increase stake in RBS and Lloyds to lower their borrowing costs. The new scheme will add 100B pounds to the 250B pounds committed previously to underwrite the toxic assets.

After 2 weeks' dispute, Russia and Ukraine are going to sign a new natural gas contract. News said that Ukraine will get 20% discount in 2009 for the gas from Russia and the price will be raised from 2010. On the other hand, Russia will need to pay the same level of transit fee to Ukraine this year. Despite the 20% discount, the cost continues to put much pressure on Ukraine's economy. In 2008, the country's GDP growth was only 2.1%, the lowest pace since 1999 and the country has already sought $16B loan from IMF.

After 22 days' of conflict, temporary ceasefire is finally declared in Gaza. While Israeli officials declared they succeeded in suppressing Hama's rocket attacked, the Hamas also announced success. Over the 3-week tension, around 1300 and 13 Palestinians and Israelis were found dead.

Gold price trades in a soft tone at around 840 today. Weakness oil price and easing inflationary pressure made gold less attractive as a hedge against inflation. A good news for gold is the dollar's intraday retreat. USD index continues to edge lower after rebounding to 85.15 on Jan 16. Aginst the Euro and pound, the greenback also lost 0.5% and 0.6% respectively.